Binance's former CEO, Changpeng Zhao (CZ), cannot be allowed to leave the U.S. ahead of his February sentencing on one charge of violating the Bank Secrecy Act, federal prosecutors said in a court filing Wednesday.
Zhao pleaded guilty and resigned from the crypto exchange he founded on Tuesday, alongside Binance pleading guilty to multiple criminal and civil charges tied to its allowing U.S. users and users from sanctioned regions to use the platform without adequate know-your-customer and anti-money laundering programs. Binance agreed to pay $4.3 billion in penalties, among the largest corporate fines in the history of the U.S. Department of Justice.
In Wednesday's filing, prosecutors said Zhao, as a citizen of the United Arab Emirates (UAE), had "minimal ties to the U.S." and may not return should he be allowed to leave. They noted that they were not asking for him to be jailed ahead of sentencing – only that he be required to remain in the U.S. His sentencing is currently scheduled for Feb. 23, 2024, and he faces potentially over a year in prison, along with a fine.
Under the terms of his current bond agreement, Zhao can leave the U.S., having put up $15 million in a trust account, signed a $175 million personal recognizance bond and found guarantors putting up additional funds.
This is insufficient, prosecutors said in Wednesday's filing. If Zhao did not return to the U.S., they wouldn't be able to secure the $175 million bond as most of his assets are outside the country, and Zhao is wealthy enough that he could pay off the rest of the funds without an issue, they said. There also isn't an extradition treaty between the UAE and the U.S.
During a hearing on Tuesday, Zhao's attorneys argued that forcing him to stay in the U.S. prior to sentencing would be a hardship for him and his family. His wife and children cannot relocate to the U.S. during the several-month period between Tuesday's hearing and February's sentencing.
Magistrate Judge Brian Tsuchida asked prosecutors on Tuesday whether that Zhao voluntarily came to the U.S. to surrender and plead guilty meant there wasn't any serious risk of flight.
There's a difference between voluntarily coming to the U.S. to plead guilty and doing so to face potential prison time, a prosecutor said in response.
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Zhao is currently in the U.S. until at least Nov. 27. If District Judge Richard Jones chooses not to 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.
