Binance Founder Changpeng Zhao To Remain In United States

Binance’s former CEO Changpeng Zhao has been refused leave by a US judge to depart the United States, ahead of his sentencing hearing next year.

Reuters reported that a federal judge ruled on Monday that Zhao must stay in the United States for the time being, temporarily thwarting his request to return to the United Arab Emirates (UAE) to allow him to take care of his partner and three children, and prepare them for his sentencing on 23 February 2024.

Last week Binance Holdings had reached a $4.3 billion (£3bn) settlement with the US Justice Department (DoJ) to resolve its years-long criminal investigation into the world’s biggest cryptocurrency exchange.

US settlement

In addition to the huge fine, Zhao, also known as CZ, had “pleaded guilty for failing to maintain an effective anti-money laundering (AML) program” and resigned his leadership role at the exchange.

Binance had been accused by US authorities of failing to report more than 100,000 suspicious transactions, including with organisations the US described as terrorist groups, such as Hamas, and the exchange allegedly never reported transactions with websites dedicated to selling child sexual abuse materials.

As part of the settlement agreement, Zhao had been allowed to keep his vast fortune (he is worth $10.2bn) and his shareholding in Binance, the exchange he founded in 2017, which raised questions about how much influence he would continue to exert on Binance going forward.

Zhao was born in China but is a Canadian and UAE citizen who resides in the United Arab Emirates (UAE).

He had entered his guilty plea in a Seattle courtroom last week.

A court filing reportedly showed that Zhao paid a $175 million bail bond, with another $15 million held in a trust account.

Zhao had agreed to return to the United States 14 days before sentencing, and has also agreed to pay a $150 million penalty to the US Commodity Futures Trading Commission.

US prosecutors in a filing last week said Zhao faces up to 18 months in prison, and Zhao has agreed not to appeal any sentence up to that length.

Prosecutors said they will take a position on how much jail time to seek closer to Zhao’s February sentencing.

Leaving US

But federal prosecutors had not been happy that Zhao was being allowed to leave the US, and last week sought to block Zhao from leaving the continental United States prior to his February sentencing.

They said in a court filing that Zhao posed a serious flight risk despite his bail conditions.

And now according to Reuters, Zhao will be required to stay in the United States until the Seattle court considers whether he should remain through his sentencing hearing in February, or if he should be allowed to return to the United Arab Emirates.

US District Judge Richard Jones in Seattle reportedly said he would review whether Zhao should have to stay in the United States after the US government appealed a decision by another judge allowing Zhao to return to the UAE before his 23 February sentencing hearing.

Lawyers for Zhao did not immediately respond to a request for comment on Monday.