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A US judge prohibits Changpeng ‘CZ’ Zhao’s departure from the nation

Monday, a federal judge ordered Changpeng Zhao, the former CEO of Binance, to remain in the United States at least provisionally following his guilty plea from last week. Prior to his sentencing, the U.S. government is attempting to prevent Zhao from returning to the United Arab Emirates.

Changpeng Zhao (CZ), founder and former CEO of Binance, was ordered by a federal court on Thursday night to remain in the United States until his sentence. The next planned hearing for Zhao, who last month admitted plea on one count of breaching the Bank Secrecy Act, will take place in February 2024. After posting a small sum in escrow and having guarantors post assets totaling around $5 million, he was released on a personal recognizance bond of $175 million. Although Zhao was initially granted permission to return to the United Arab Emirates (UAE), where he resides with his spouse, children, and parents, prosecutors contended that he posed a flight risk and should not be allowed to leave the United States.

There is no official extradition treaty between the United States and the country where Zhao resides, the United Arab Emirates. According to Judge Richard Jones of the United States District Court in Seattle, Zhao will not be able to go back to the United Arab Emirates “until such time as this Court resolves the Government’s motion for review.”

“In the vast majority of cases, a multi-billionaire defendant who has pleaded guilty, faces possible prison time, and lives in a country that does not extradite its citizens to the United States would be detained,”

The Government wrote in a filing to the Court

After pleading guilty to knowingly causing the exchange to fail to maintain an effective anti-money laundering policy, Zhao, a Canadian citizen, resigned last week as CEO of Binance. U.S. District Judge Richard Jones of Seattle has said that he would consider the government’s appeal of a lower court’s decision to let Zhao return to the UAE prior to his sentencing hearing on February 23 in determining whether Zhao should be required to remain in the US. The bail deal included Zhao’s commitment to post a bond of $175 million.

Prosecutors stated that they had previously proposed a “outstanding recommendation” that Zhao be granted post-sentencing release. Zhao, they stated, poses a flight risk that “could be contained through the imposition of a stay-in requirement in the United States and a prohibition on his return to the UAE, where he currently finds refuge.”

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 Judge wrote

Formerly, defense attorneys asserted that Zhao’s flight to the United States to face charges established his accountable. It was unnecessary, they stated, to uproot his family for the solitary purpose of February’s sentencing. However, federal prosecutors ultimately persuaded Jones that Zhao still possesses the ability to evade additional legal repercussions, notwithstanding the substantial surety money that was forfeited. Regarding the possibility or timing of Jones scheduling a bond hearing, nothing is known.

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