federal judge in Seattle has ruled that Changpeng Zhao, the founder and former CEO of cryptocurrency exchange Binance, must remain in the United States while awaiting his February 2024’s sentencing on money laundering charges.
Judge Overturns Previous Ruling Allowing CZ to Return to UAE
The decision by U.S. District Judge Richard Jones overturned a previous ruling by a magistrate judge that would have allowed Zhao, commonly known as CZ, to return to the United Arab Emirates where he had been residing pending his sentencing date.
Prosecutors had argued that CZ's considerable wealth abroad represented a significant flight risk if he was allowed to leave the U.S.
Wealth and Access to Funds Abroad Cited as Flight Risk Factor
In his ruling, Judge Jones acknowledged the unusual step of overturning a magistrate's pre-sentencing decision, but said he was ultimately persuaded by the Justice Department's argument.
The judge specifically cited CZ's vast wealth, most of which is believed to be held overseas, as well as his access to hundreds of millions in cryptocurrencies as factors that could incentivize forfeiting his $175 million bond in exchange for escaping sentencing.
CZ Faces Maximum 18 Months in Prison for Money Laundering Charges
The money laundering charges stem from allegations that Binance failed to implement proper anti-money laundering controls and procedures, allowing criminal transactions to flow through the exchange.
Last month, Binance agreed to pay over $4 billion, one of the largest fines ever imposed on a company by the U.S., to settle the charges against it. CZ also personally agreed to pay $50 million. As an individual, CZ faces a maximum sentence of 18 months in prison when sentenced in February.
Residence and Citizenship Status Also Cited as Flight Risk Factors
In his ruling, Judge Jones noted CZ's Canadian citizenship from age 12, but lack of current ties to Canada. The judge also referenced an unverified Justice Department claim that CZ had been offered citizenship in the UAE.
Given the UAE's lack of an extradition treaty with the U.S., these factors contributed to the court's view that CZ needed to remain stateside to ensure his appearance at sentencing.
For now, CZ will stay in the continental U.S. on condition of his continued liberty pending his February court date.