A federal judge in Seattle has ruled that Chanpeng Zhao, the former CEO of Binance, is not permitted to return to his home in the United Arab Emirates before his sentencing in the United States, set for February.
The decision, issued by U.S. District Judge Richard Jones, follows concerns raised by prosecutors regarding Zhao’s potential flight risk.
The ruling comes after CZ pleaded guilty in a Seattle court in November to charges related to violating the Bank Secrecy Act. In addition to these charges, Zhao has agreed to pay a $50 million fine. This latest judgment overturns a prior decision by a magistrate judge which would have allowed Zhao to return to the UAE.
In his deliberation, Judge Jones acknowledged the rarity of overruling a magistrate judge’s pre-sentencing decision. However, he was swayed by the Justice Department’s argument that Zhao’s massive wealth and the lack of an extradition treaty between the UAE and the U.S. posed flight risks. Despite Zhao posting a $175 million bond, the judge was concerned that Zhao’s considerable financial resources as the founder of Binance might lead him to forfeit the bond in exchange for his freedom.
“The government’s fear is supported by its belief that the vast majority of the defendant’s wealth is held overseas and the belief that he has access to hundreds of millions of dollars in accessible cryptocurrency,” the judge said.
Zhao, whose leadership at Binance placed him among the most influential figures in the cryptocurrency industry, could face up to 18 months in prison. The charges against him stem from allegations that Binance failed to address criminal transactions on its platforms, leading to money laundering activities.
Zhao’s defense argues that he does not pose a flight risk, as previously determined by Judge Brian Tsuchida, and that the government has not provided adequate grounds for an appeal to overturn this finding. They elaborated on CZ’s visibility as a global public figure and his track record, including a lack of criminal history and the non-violent nature of his offenses, to argue against the necessity of him staying in the U.S. before sentencing.
The defense also suggests that since Binance founder could serve a portion of his sentence in a non-jail setting, there is little motivation for him to flee and face additional charges. They point out that his family ties and residence in the UAE should not inherently mark him as a flight risk, especially given his willingness to face the legal consequences and return to his family post-sentencing.
Refuting the prosecutors’ concern over Zhao’s wealth and the absence of a U.S.-UAE extradition treaty, the defense notes his voluntary return to the U.S. to face charges. They mentioned his bail conditions, including a $175 million personal bond backed by guarantor pledges, as evidence of his commitment to comply with U.S. judicial proceedings.
