US DOJ Consider Binance’s ex-CEO Changpeng Zhao a ‘Flight Risk’
Changpeng Zhao, the founder and former CEO of Binance, is facing pushback from U.S. prosecutors who want him to remain in the country. The prosecution team believes Zhao, known as CZ, represents a substantial risk of flight due to his minimal ties with the U.S. and significant wealth held outside the country.
As per a Wednesday filing, prosecutors request that Changpeng Zhao, a citizen of both the United Arab Emirates (UAE) and Canada, not leave the U.S. before his sentencing on February 23, 2024. This request follows Zhao’s guilty plea to one count of causing Binance to fail to maintain an effective anti-money laundering program.
Previously, Magistrate Judge Brian Tsuchida had allowed Zhao to return to the UAE on an appearance bond of $175 million, secured by $15 million in cash and potential property or cash pledges by three responsible individuals. Zhao would then be required to return to the U.S. by February 9, 2024.
However, prosecutors have now argued that CZ has not provided clear and convincing evidence that he will not flee if he returns to the UAE. They point to his significant assets in the UAE, the U.S. government’s inability to extradite him from there, and his strong ties to the Middle Eastern country as reasons to keep him in the U.S. until his sentencing.
Should Zhao decide not to return, the government stated they “would not be able to secure his return.” He currently resides in the UAE with three young children and a partner, and prosecutors fear that facing the possibility of up to 18 months of prison in the U.S., Zhao might choose to stay with his family in the UAE.
The prosecution also argued that the $175 million bond securing Zhao’s release is largely inadequate as most of the money is held overseas which is out of the U.S.’s reach. With the majority of Zhao’s wealth stored overseas, it is feared he could live indefinitely in the UAE beyond U.S. jurisdiction.
Zhao recently pleaded guilty to failing to implement an effective Anti-Money Laundering (AML) program at Binance. As part of his plea agreement, he relinquished his role as CEO of Binance and paid a $50-million fine.
Despite the negative news surrounding one of the crypto industry’s most influential figures, the industry remains resilient. Crypto markets have rebounded, and the total market capitalization has already returned to pre-Binance news levels, reaching $1.48 trillion.
Experts believe Binance’s settlement with the Justice Department is a positive outcome for the crypto industry, further legitimizing it in the U.S.
