Binance’s former CEO, Changpeng Zhao (CZ), faces restrictions on leaving the United States before his February sentencing for violating the Bank Secrecy Act, according to federal prosecutors in a court filing Wednesday.
Zhao admitted guilt and stepped down from the cryptocurrency exchange he co-founded on Tuesday. Binance, also pleading guilty to multiple charges, agreed to pay a record $4.3 billion in penalties to the U.S. Department of Justice for allowing U.S. users and individuals from sanctioned regions to access the platform without adequate money laundering and know-your-customer programs.
In a court filing on Wednesday, prosecutors expressed concern about Zhao leaving the U.S. They argued that as a citizen of the United Arab Emirates with minimal ties to the U.S., there’s a risk he might not return. His sentencing is set for Feb. 23, 2024, and he faces potential imprisonment and fines.
Currently, Zhao can leave the U.S. under his bond agreement terms, but prosecutors claim his $15 million trust account and additional funds from guarantors are insufficient. They fear Zhao’s wealth and assets outside the country could jeopardize the $175 million bond if he fails to return, especially given the absence of an extradition treaty between the UAE and the U.S.
During Tuesday’s hearing, Zhao’s lawyers argued that keeping him in the U.S. until sentencing would be difficult for his family. Concerned, Magistrate Judge Brian Tsuchida questioned whether Zhao’s voluntary appearance indicated a flight risk, to which prosecutors emphasized the distinction between voluntarily appearing and facing potential prison time.
Zhao is currently in the U.S. until at least Nov. 27. If District Judge Richard Jones does not review the DOJ filing by 5:00 p.m. Pacific Time on that day, Zhao will be free to return to the UAE, but must come back to the U.S. by Feb. 10.
