Founder and former CEO of crypto exchange Binance, CZ, is facing a new challenge as he awaits sentencing in the United States after pleading guilty to money laundering charges.
In a significant turn of events, Seattle District Court Judge Richard Jones ruled that Zhao must stay within the United States until his sentencing date on February 23, 2024.
The judge’s decision stemmed from concerns about Zhao’s potential flight risk, citing his substantial wealth abroad and his lack of significant ties to the U.S.
The ruling followed Zhao’s plea of guilty on November 21, which could lead to a maximum of 18 months in prison. His agreement not to contest a sentence of that duration seemed to sway the judge’s decision.
Judge Jones echoed federal prosecutors’ fears that Zhao might not return to the U.S., emphasizing the defendant’s extensive assets and family residing in the United Arab Emirates (UAE).
The court highlighted Zhao’s privileged status in the UAE and his substantial foreign holdings, leading to the determination that he had not presented compelling evidence suggesting he would not flee if allowed to return to Dubai, his current residence.
“The court agrees with the government that this is an unusual case. 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 the 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. The bond conditions allow the defendant to remain free and travel within the United States, and his family is free to visit him in the United States. These are hardly burdensome impositions on the defendants, freedom pending sentencing.”
Moreover, Judge Jones accepted Zhao’s guilty plea on December 6 but deferred a decision on permitting him to return to Dubai until the recent ruling. Presently, Zhao remains under a substantial $175 million bond, largely comprised of assets beyond the immediate reach of the authorities.
While the bond permits Zhao to travel within the U.S. freely and allows visits from his family, the judge emphasized that these conditions were not overly restrictive, considering the scale of the case and its potential implications.
It is worth noting that his legal turmoil comes in the wake of Binance’s $4.3 billion settlement with U.S. regulators in November. The settlement admitted to the operation of an unlicensed money-transmitting business and violations of the Bank Secrecy Act. Consequently, Zhao stepped down as CEO as part of the agreement.