Changpeng "CZ" Zhao, the founder of Binance, has been directed by a federal judge to stay in the United States until his sentencing in February. The judge cited concerns about Zhao being a flight risk if he were to return to the United Arab Emirates (UAE). Zhao faces a potential 18-month prison sentence after pleading guilty to money laundering on November 21. The judge noted the defendant's significant wealth and property abroad, along with his family residing in the UAE, as factors contributing to the flight risk. Zhao's guilty plea is part of Binance's settlement with U.S. regulators, involving a $4.3 billion fine and admission of running an unlicensed money-transmitting business.
Flight Risk Concerns and Sentencing Date
Seattle District Court Judge Richard Jones issued an order on December 7, requiring Zhao to remain in the U.S. until his sentencing on February 23, 2024. The judge agreed with federal prosecutors' arguments that Zhao's ties to the UAE and lack of connections in the U.S. pose a substantial flight risk. The court emphasized that Zhao has not established, by clear and convincing evidence, that he is unlikely to flee if he returns to the UAE. Zhao's guilty plea carries the potential for an 18-month prison term, and he has agreed not to appeal any sentence up to that length.
Wealth and Family Ties as Factors
Judge Jones highlighted Zhao's significant wealth and property abroad, along with his family residing in the UAE, as key considerations in the decision. The judge pointed out that Zhao's bond, set at $175 million, appears to be primarily comprised of assets beyond the government's reach. While acknowledging that the bond conditions allow Zhao to freely travel within the U.S. and permit family visits, the judge deemed these conditions as minimal impositions on the defendant's freedom.
Binance Settlement and CEO Change
In November, Binance and Zhao reached a settlement with U.S. regulators, agreeing to pay a $4.3 billion fine for running an unlicensed money-transmitting business and violating the Bank Secrecy Act. As part of the settlement, Zhao stepped down as the CEO of Binance. The regulatory actions against Binance and its founder underscore the challenges faced by major cryptocurrency exchanges in navigating regulatory landscapes and complying with financial regulations.
