Binance Founder CZ Prohibited from Leaving the US Before Sentencing
Changpeng “CZ” Zhao, co-founder of Binance, cannot return to the United Arab Emirates (UAE) before his February 2024 sentencing in Seattle. A federal judge accepted CZ’s guilty plea for violating the Bank Secrecy Act and issued a travel restriction order, citing flight risk due to his wealth, family in the UAE, and the absence of an extradition treaty.
Key Points
- The judge ruled that CZ cannot return to the UAE until after his February 2024 sentencing
- CZ pleaded guilty to a Bank Secrecy Act violation charge
- The judge acknowledged CZ’s justifications for travel but cited concerns about flight risk
- The government indicated CZ could face up to 18 months in prison
- The judge stated that CZ facing a significant sentence substantiates flight risk concerns
CZ has been released on a $175 million bond since admitting that Binance facilitated illegal crypto transactions. Initially, his bail terms allowed him to return to the UAE as long as he came back to the US two weeks before his sentencing. However, prosecutors appealed this provision, arguing that CZ poses a high flight risk.
Judge Forbids CZ from Returning to the UAE
On Thursday, the federal judge agreed with the government and prohibited CZ from returning to the UAE for now. The judge considered several factors contributing to the elevated flight risk, including CZ’s wealth, lack of an extradition treaty with the UAE, and his family ties to the region. Additionally, CZ’s limited ties to the US weighed against approving overseas travel.
“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.”
The potential recommendation of up to 18 months in prison further influenced the judge’s decision. This significant sentence increases the risk that CZ may not appear in court when required.
Ensuring CZ Faces Sentencing
CZ maintains that he accepts responsibility, and in most cases, foreign travel is allowed in similar situations. However, his admissions mark a landmark enforcement action in the crypto industry, and it seems that the justice system wants to ensure he does not evade sentencing. CZ is currently complying with US conditions and has temporarily stepped down from his leadership role at Binance.
Hot Take: CZ Restricted from Leaving US Before Sentencing
The founder of Binance, CZ, has been prohibited from returning to the UAE before his February 2024 sentencing due to concerns about flight risk. The judge cited CZ’s wealth, lack of an extradition treaty with the UAE, and family ties to the region as factors contributing to this decision. Facing a potential recommendation of up to 18 months in prison, CZ’s restricted travel aims to ensure his presence for sentencing. Despite accepting responsibility and complying with US conditions so far, CZ’s admissions represent a significant enforcement action within the crypto industry. Only time will reveal if he will face jail time or if a substantial fine will serve as sufficient punishment.
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