Binance Co-Founder CZ Confined to U.S. Soil: Court Rules on Travel Before Sentencing

A federal judge in Seattle made a ruling yesterday that restricts former Binance CEO Changpeng Zhao (better known in the crypto space by his nickname “CZ”) to travel within the United States until his sentencing in February 2024.

On December 6, 2023, Zhao’s guilty plea to one count of violating the Bank Secrecy Act was officially accepted by U.S. District Judge Richard Jones of the Western District of Washington. The acceptance of Zhao’s plea came just over two weeks after he, along with Binance, admitted to various violations tied to inadequate anti-money laundering practices. In his ruling, Judge Jones stated that after considering the recommendation of the United States Magistrate Judge and noting the absence of any timely objection, he adjudged Zhao guilty of the offense. This followed Zhao’s decision to step down from his position as CEO of Binance as part of the plea agreement.

Zhao’s sentencing is scheduled for February 23, 2024. Although he has been released on bond, there has been significant debate over whether he should be allowed to return to the UAE, where his family resides, before sentencing. Initially, Zhao’s bond conditions permitted him to travel back, provided he returned to the U.S. two weeks prior to his sentencing. However, Judge Jones placed a hold on this part of Zhao’s release last week, pending a final decision on the matter, effectively requiring him to stay in the United States for now.

On December 7, 2023, Judge Jones ruled that Zhao cannot return to the UAE before his sentencing. In his ruling, Judge Jones acknowledged the justifications provided by Zhao, which would typically lead to denial of the government’s motion. However, the judge emphasized the unique aspects of Zhao’s case, particularly his vast wealth, the absence of an extradition treaty with the UAE, and Zhao’s family residing in the UAE. The judge also highlighted that Zhao is facing a significant sentence, potentially up to 18 months, as per the government’s indications, which substantiates the flight risk concerns.

The Judge wrote:

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.

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2023-12-08 12:02