U.S. government prosecutors are taking steps to prevent former Binance CEO Changpeng “CZ” Zhao from leaving the United States, citing concerns about his potential flight risk.
In a filing made on November 22 to a federal court in Seattle, prosecutors requested a review and reversal of a judge’s decision that would have allowed Zhao to return to his home in the United Arab Emirates (UAE) on a $175 million bond, provided that he comes back to the U.S. two weeks before his sentencing scheduled for February 2024.
The prosecutors argued in their proposed order that Zhao poses an “unacceptable risk of flight and nonappearance” if allowed to leave the United States before his sentencing. They expressed serious doubts about their ability to ensure his return if he decides not to come back voluntarily.
The government’s case against Zhao is based on his strong ties and privileged status in the UAE, coupled with the absence of an extradition treaty between the UAE and the U.S. Prosecutors pointed out that Zhao has a partner and three young children in the UAE, and once he is in the UAE, he might choose to remain there with his family rather than facing the prospect of up to 18 months in a U.S. prison.
READ MORE: CEO Resignation and Binance-DOJ Settlement Send Shockwaves Through Cryptocurrency Markets
Furthermore, prosecutors argued that the majority of Zhao’s wealth, which was used to secure his $175 million bond, is held outside the United States and beyond the reach of U.S. jurisdiction.
Changpeng Zhao recently admitted to failing to maintain an effective Anti-Money Laundering program at Binance as part of a plea agreement.
This led to his resignation as CEO of the exchange and a $50 million fine.
Despite this legal setback, industry experts and observers view Binance’s settlement with the Justice Department as a positive development for the cryptocurrency industry, as it further legitimizes the industry in the United States.
Crypto markets have already rebounded from the negative news surrounding one of the industry’s most influential players, with the total market capitalization returning to pre-Binance news levels, reaching $1.48 trillion during the Thursday morning Asian trading session.
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