A federal judge in Seattle ruled Thursday that Changpeng Zhao, founder of the cryptocurrency exchange Binance, must remain in the United States in the months leading up to his sentencing on criminal charges related to anti-money laundering violations.
U.S. District Judge Richard Jones granted federal prosecutors’ request to impose travel restrictions on Zhao, who had previously secured a separate ruling that allowed him to return to his home in the United Arab Emirates prior to his February sentencing.
In reversing that decision, Jones said that Zhao’s “enormous wealth” overseas and the lack of an extradition treaty between the U.S. and the UAE posed too great of a flight risk.
“The Court agrees with the government that this is an unusual case,” Jones wrote in his ruling. “The defendant has enormous wealth and property abroad, and no ties to the United States.”
Zhao—a Chinese-Canadian entrepreneur who built Binance into the world’s largest cryptocurrency exchange—pleaded guilty last month to failing to maintain an effective anti-money laundering program. He faces 10 to 18 months in prison under federal sentencing guidelines.
Prosecutors argued that the 45-year-old billionaire should remain in the U.S. because he could easily flee and sustain any financial losses from losing his $175 million bond an an additional $5 million in collateral. They also suggested the United Arab Emirates government might shield Zhao from U.S. extradition attempts due to the citizenship and residency status he holds there.
Zhao’s attorneys downplayed such concerns, stressing their client’s willingness to surrender and admit wrongdoing. The government, meanwhile, asserted that the billionaire would be just fine.
”The bond conditions allow the defendant to remain free and to travel within the United States, and his family is free to visit him in the United States,” Jones wrote. “These are hardly burdensome impositions on the defendant’s freedom pending sentencing.”
Jones sided with the government’s position but made clear in his ruling that the decision was not based upon “the defendant’s alienage or citizenship.”
Zhao helped launch Binance in Shanghai in 2017 and later relocated company operations to Malta and the Cayman Islands. U.S. authorities have investigated the exchange for facilitating illegal transactions.
Last year, Binance agreed to pay millions in fines and forfeitures for “willfully failing” to guard against money laundering and other illicit activity, though no individuals faced charges until prosecutors indicted Zhao this November.
The decision by U.S. District Judge Richard A. Jones prolongs an earlier ruling that would have allowed Zhao to go back to his family in the United Arab Emirates. Federal prosecutors warned the Chinese-Canadian entrepreneur might flee given his wealth and the lack of an extradition treaty with the UAE.
Just last week, a Department of Justice spokesperson had told Reuters that Zhao could return to the UAE after Monday evening while awaiting his fate. But those plans changed after prosecutors insisted the 45-year-old posed too great of a flight risk, despite putting up a hefty $175 million bond and pleading guilty.
“The Court agrees with the government that this is an unusual case,” wrote Jones in his Thursday ruling, citing Zhao’s “enormous wealth and property abroad” as reason to impose travel limitations.
The ongoing legal drama stems from federal investigations showing Binance, the world’s largest crypto exchange Zhao founded in 2017, enabled illegal transactions.
Zhao stepped down as CEO last month upon the company reaching a $4.3 billion settlement tied to sanctions and money transmission violations. Personally, he faces up to 10 years in prison and $50 million in fines per his own plea deal with the Department of Justice.
Defense lawyers previously claimed Zhao already proved accountable by flying to America to face charges. They said uprooting his family solely for February’s sentencing was unnecessary.
But federal prosecutors ultimately convinced Jones that Zhao retains means to dodge further legal punishment, even despite forfeiting significant bonding money. It remains unclear if or when Jones might schedule a bond hearing.
For now, the embattled Zhao remains restricted to U.S. soil pending his fate – the latest twist for an industry rocked by crypto’s uncertain legal status.
Editor’s note: This story was drafted with Decrypt AI from sources referenced in the text, and fact-checked by Ryan Ozawa.
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Source: https://decrypt.co/209060/us-judge-bans-changpeng-cz-zhao-from-leaving-the-country
