Changpeng “CZ” Zhao, the founder of Binance, has been declared as posing “no risk of flight” by his legal team. They argue that he should be permitted to return to the United Arab Emirates (UAE), as per a recent filing. This statement comes in response to a filing by the U.S. Department of Justice (DOJ) that suggested Zhao should remain in the U.S. until his sentencing in February, following his guilty plea to a charge of violating the Bank Secrecy Act.
Arguments in Favor of Zhao
The legal counsel for Zhao insists that his decision to travel to the U.S. to enter his plea is proof enough that he does not pose a flight risk. The Magistrate Judge presiding over his case, Judge Brian Tsuchida, has concurred with this reasoning, finding Zhao’s initial appearance compelling. The filing further states, “Given all relevant facts, including Mr. Zhao’s voluntary self-surrender, his intent to resolve this case, and the substantial bail package he proposed, Judge Tsuchida determined that Mr. Zhao presents no risk of flight, even while residing in the UAE.”
Binance’s Guilty Plea and Consequences
Earlier this week, Binance, along with Zhao, pleaded guilty to several charges. The company has agreed to pay a hefty fine of $4.3 billion, assign monitors to oversee its compliance program, review past transactions, and accept Zhao’s resignation as CEO. Richard Teng, former head of Binance’s regional markets, has assumed the role of CEO. Zhao was released on a $175 million personal recognizance bond on Tuesday.
However, there is ongoing disagreement between Zhao’s attorneys and the DOJ regarding his potential return to the UAE, where he holds citizenship and his family resides. If Zhao does return to the UAE, he must come back to the U.S. two weeks before his sentencing. The DOJ contends that Zhao could afford to forfeit the $15 million he deposited into a trust account and the $5 million put up by his guarantors.
The Counter Argument
Zhao’s legal team maintains that this argument overlooks the financial commitment made by Zhao and Binance. They also claim that other DOJ arguments similarly disregard everything Zhao has already done, such as traveling to the U.S. to begin with. “Against the weight of all this information and Judge Tsuchida’s consideration of it, the government provides no meritorious – or additional – basis to insist that Mr. Zhao remain in the United States away from his family for months between his plea and sentencing,” the filing stated.
Zhao’s sentencing is currently scheduled for Feb. 23, 2024. He faces a potential 18-month prison term and agreed to pay a $50 million fine as part of his plea agreement.
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