Changpeng Zhao Founder of Binance is too rich to leave the U.S. before Criminal Sentencing, Judge says :
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A federal judge decided that billionaire Changpeng Zhao, the founder of Binance, cannot leave the country before his criminal sentencing due to his "enormous wealth" and lack of ties to the country.The decision overturns an earlier ruling that had permitted Zhao, the titan of the cryptocurrency industry also known as CZ, to visit his home in the United Arab Emirates prior to his sentencing on February 23.United States District Judge Richard Jones stated, "This is an unusual case," in supporting the federal prosecutors.
"The defendant has no ties to the United States and a great deal of wealth and property abroad. Jones wrote in a six-page order on Thursday in federal court in Seattle, Washington, that "his family resides in the United Arab Emirates and it appears that he has favored status there."The court concluded that Jones had not provided sufficient evidence to prove he would not likely flee if he returned to the United Arab Emirates.
The world's largest cryptocurrency exchange's face and former CEO, Zhao, entered a guilty plea to a charge of breaking federal money laundering regulations last month. In addition, Binance admitted guilt to the relevant charges and agreed to pay fines totaling more than $4.3 billion.
Zhao was first granted permission by a federal magistrate judge to return to his overseas residence while awaiting his sentencing. He was later freed on a $175 million bond. However, the prosecution requested that the ruling be overturned, claiming that Zhao's return to the United States could not be guaranteed under "any combination of conditions."
They pointed out that the United States and the United Arab Emirates do not have an extradition treaty, and the government was unable to locate any instance of the UAE extraditing a citizen to the United States.
They wrote, "This case likely would not be the first," adding that Zhao is a multibillionaire and that the majority of his wealth is probably held abroad.
The U.S. prosecutors stated that the founder, who was born in China, "is himself an indication of his favored position" because citizenship to the United Arab Emirates must be offered by the government.
Furthermore, they contended that, should Zhao choose to remain in the United Arab Emirates, the majority of his $175 million bond is linked to assets that are outside of U.S. jurisdiction.
According to court documents, Zhao sent his attorney $15 million in security, and his bond is backed by three unidentified guarantors who attest to the worth of slightly more than $5 million in assets. However, the prosecutors pointed out that the balance of his bond is "beyond the government's reach."
Jones had last week put a temporary stop on Zhao's travels home while he reviewed the government's request to remain in the United States.
Because Zhao and Binance have accepted full responsibility for their actions and because he has no criminal history, his lawyers have argued that he is not a flight risk.
They also mentioned Zhao's agreement with the government, which calls for him to pay a $150 million penalty to the U.S. Commodity Futures Trading Commission.
Furthermore, they contended that, should Zhao choose to remain in the United Arab Emirates, the majority of his $175 million bond is linked to assets that are outside of U.S. jurisdiction.
Jones had last week put a temporary stop on Zhao's travels home while he reviewed the government's request to remain in the United States.
Jones wrote in the ruling on Thursday that those arguments would be adequate in the majority of cases.
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However, he wrote that "the extent of the defendant's enormous wealth and absence of an extradition treaty with the UAE is a critical feature of the government’s motion."The judge added, "There is no indication the defendant has any other ties to the United States, and his family resides in the United Arab Emirates." Zhao "is not facing an insignificant sentence," he continued, adding that the government might request an 18-month prison sentence for him.
