Key Takeaways
- Changpeng (CZ) Zhao was barred from traveling to the UAE due to flight risk concerns.
- Judge cited flight risk concerns, potential UAE citizenship offer.
- Zhao remains free within US borders, faces sentencing in February.
Last month, a federal judge denied a request by Binance founder Changpeng “CZ” Zhao to travel to the United Arab Emirates, despite Zhao’s offer to post his Binance equity, valued at $4.5 billion, as security for his return to the U.S.
This decision was revealed in a recent court filing. Zhao’s lawyers had noted the value of the equity, based on Binance’s last fundraising round two years ago, in a December 22 letter to Judge Richard Jones.
Despite Plea, Zhao Can’t Leave US Due to Flight Risk Concerns
Zhao, who pleaded guilty in November in Seattle federal court for failing to maintain an effective anti-money laundering program at Binance, the world’s largest cryptocurrency exchange, agreed to a $4.3 billion penalty in the case. Following his plea, Zhao stepped down as CEO and is now scheduled for sentencing on February 23.
In the December letter, Zhao’s lawyers requested permission for him to travel to Abu Dhabi from January 4 for one to four weeks to attend to a family member’s hospitalization and surgery, details of which, including the person’s name, were redacted in the filed letter. The letter also stated that federal prosecutors had not consented to Zhao’s travel request.
Judge Jones raised concerns about Zhao’s potential flight risk, citing an unconfirmed report from the Justice Department that the United Arab Emirates (UAE) had offered Zhao citizenship. This concern was amplified by the fact that the UAE does not have an extradition treaty with the U.S. Additionally, Judge Jones highlighted Zhao’s status as a multibillionaire and noted that his family resides in the UAE.
Granted Stay of Execution, Faces Sentencing in February
Despite these factors, Judge Jones acknowledged that Zhao does not pose a threat to the public. Consequently, he allowed Zhao to remain free, with the stipulation that he must stay within the continental United States, until his sentencing in February.
This situation, with Zhao awaiting his sentencing in the U.S., adds another significant chapter to the evolving story of the cryptocurrency industry, which continues to navigate through a landscape filled with legal complexities and uncertainties.
Jones wrote:
“The defendant has enormous wealth and property abroad, and no ties to the United States. His family resides in the UAE and it appears that he has favored status in the UAE. Under these circumstances the Court finds that the defendant has not established by clear and convincing evidence that he is not likely to flee if he returns to the UAE.”
Remaining Free Within U.S. Borders
Per the court’s order, Changpeng “CZ” Zhao is to remain at liberty on a $175 million bond. In a similar situation, former Celsius CEO Alex Mashinsky, who was arrested in July on charges of allegedly misleading and defrauding users, was released on a $40 million bond.
Sam Bankman-Fried, the former CEO of FTX, was initially allowed to stay at his parents’ home in California after being extradited to the U.S. in 2022. However, he was later taken into custody following accusations of witness tampering.
The specifics of the medical information that Zhao’s legal team submitted to the court confidentially remain unknown.
Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear.
Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3.
An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.
