Changpeng “CZ” Zhao, co-founder of crypto exchange giant Binance, has been prohibited from leaving the United States to return home to the United Arab Emirates prior to his February 2024 sentencing in Seattle. The federal judge overseeing CZ’s case formally accepted his guilty plea this week to a Bank Secrecy Act violation charge before issuing the stunning travel restriction order.
Keypoints
- Federal judge ruled Binance founder CZ cannot return to UAE before his February 2024 sentencing
- CZ pleading guilty to one charge of violating Bank Secrecy Act was formally accepted this week
- Judge acknowledged CZ’s justifications for travel but cited flight risk due to wealth, family in UAE, no extradition treaty
- Government indicated CZ could face up to 18 months in prison at sentencing
- Judge said CZ facing significant sentence substantiates flight risk concerns prohibiting his pre-sentencing return to UAE
CZ has been released on a $175 million bond since striking a deal with U.S. authorities last month admitting Binance facilitated illegal crypto transactions. His plea was made alongside Binance itself agreeing to pay $4.3 billion in fines related to flouting anti-money laundering rules.
Initially, CZ’s bail terms allowed him to fly back to the UAE where his family is based, as long as he returned stateside two weeks before his looming sentencing date. However, prosecutors appealed this provision, strenuously arguing the billionaire tech mogul poses an extreme flight risk if permitted to leave the country pre-sentencing.
On Thursday, the federal judge sided with the government in forbidding CZ from returning to the UAE for now. He cited several unique circumstances substantiating the elevated flight risk, including CZ’s vast wealth, absence of an extradition pact with the UAE, and his anchor to the region as his partner and children reside there. The lack of any substantial U.S. ties for CZ was also a factor weighing against overseas travel approval.
“The defendant has articulated justifications that in most cases would cause the government’s motion to be denied. However, a critical feature of the government’s motion is the extent of the defendant’s enormous wealth and absence of an extradition treaty with the UAE. In addition, the defendant’s family resides in the UAE and there is no indication he has any other ties to the United States. While the defendant has indicated he will be asking for a lesser sentence, the government has indicated it may be asking for as much as 18 months of incarceration. Consequently, the defendant is not facing an insignificant sentence.“
Further influencing the restrictive ruling was CZ facing up to 18 months behind bars according to a potential sentencing recommendation previewed by prosecutors. This represents serious prison time versus probation, augmenting incentives not to show up for court down the line.
Of course CZ maintains he accepted responsibility and the judge himself previously defended allowing foreign travel in most similar cases. But CZ and Binance’s admissions mark a landmark crypto enforcement action, and the justice system seems intent on ensuring he doesn’t somehow slip the noose before facing sentencing next February.
For his part, CZ appears to be complying fully with the U.S. conditions so far, even stepping down from Binance leadership temporarily. Only time will tell whether he ultimately receives jail time or if a massive fine ends up being punishment enough for the crypto mogul. But one thing now seems certain: CZ won’t be going anywhere outside the U.S. until his fate on American soil gets decided first.
