Former Binance CEO Changpeng Zhao (CZ) is contesting the United States government’s attempt to hinder his travel plans to the United Arab Emirates (UAE). Notably, he wishes to be with his family during the waiting period before his sentencing on February 23, 2024.
Changpeng Zhao is a “Flight Risk”
Magistrate Judge Brian A. Tsuchida granted CZ permission to travel to the UAE on November 21, emphasizing that his presence in the guilty plea process indicated no flight risk. However, on November 22, U.S. prosecutors filed a court document arguing for restrictions on Zhao’s departure from the United States. They cited concerns about him being a flight risk in the dispute over bond terms.
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In response, on November 23, Zhao’s legal team filed a motion urging a U.S. district judge to reject proposed changes to his bail conditions. They emphasized his commitment to returning to the UAE until his sentencing, asserting that he should be allowed to reside with his family. The filing stated:
“As Judge Tsuchida found, all the facts and circumstances amply demonstrate that Mr. Zhao poses no risk of flight and should be permitted to reside at home with his family in the UAE pending sentencing. The government’s motion should be denied.”
The lawyers added that CZ had already taken responsibility for his actions by flying from the UAE to the United States, indicating his intent to resolve the case logically and appear for sentencing.
Reasons Behind the DOJ’s Travel Restriction Request
In their November 22 filing, the Department of Justice argued that CZ’s strong ties to the UAE, where he holds citizenship, and his substantial financial resources could pose a flight risk. The prosecutors highlighted his “favored position” in the UAE, suggesting difficulties in extradition if he were to flee.
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The DoJ argued that Zhao would not leave his family to come to the United States and potentially face imprisonment. The filing states:
“As Zhao explained during the hearing, he has three young children and a partner in the UAE; once in the UAE and faced with the prospect of traveling back to the United States to face up to 18 months in prison, he may elect to instead simply stay in the UAE with his family.”
In contrast, according to a bond document filed with the court on November 21, Binance‘s former CEO already has a $175 million release bond. Moreover, he had committed to returning to the U.S. 14 days before his sentencing in February next year.
This legal battle follows Zhao’s agreement to step down as the exchange’s CEO after pleading guilty to charges by the DoJ.
While maintaining his majority stake in Binance, he will not hold an executive position. Notably, the deal does not affect Binance’s pending litigation with the United States Securities and Exchange Commission (SEC), but it resolves issues with the Commodities Futures Trading Commission (CFTC).