A federal judge in Seattle ruled Thursday that the founder and former CEO of Binance, who is awaiting sentencing after pleading guilty to money laundering charges, must remain in the country.
The order came after the Justice Department appealed a district judge’s earlier ruling that Changpeng Zhao – known as “CZ” in the crypto world – could return to the UAE in awaiting his sentencing hearing scheduled for February.
In his ruling, U.S. District Judge Richard Jones wrote that it was unusual to overturn a magistrate’s pre-sentencing decision, but that he was convinced by the Justice Department’s argument that Zhao represented a flight risk. Jones noted that the $175 million bail posted by Zhao was “substantial, if not unprecedented,” but that the Binance founder’s immense wealth meant he might be willing to forfeit bail in exchange for his freedom .
“The government’s fear is supported by its belief that the vast majority of defendant’s wealth is held offshore and by the belief that he has access to hundreds of millions of dollars in accessible cryptocurrency,” Jones wrote.
Zhao faces a maximum sentence of 18 months in prison for money laundering charges, which stem from Binance allegedly turning a blind eye to criminal transactions on its platforms. In one of the largest corporate fines in U.S. history, Binance last month agreed to pay more than $4 billion to settle the charges while Zhao agreed to personally pay $50 million.
Zhao, who has long treated Binance as a stateless entity, is a citizen of Canada, where he moved when he was 12, but no longer has links for the country. In his ruling, Jones cited an unverified Justice Department claim that Zhao had been offered citizenship by the United Arab Emirates as further evidence that he might pose a flight risk and would take advantage of the the absence of an extradition treaty between the country and the United States. The judge also noted that Zhao is a “multi-billionaire” and that his family resides in the United Arab Emirates.
Jones, however, said Zhao posed no danger to the community and could remain free pending his sentencing hearing in February, as long as he remained in the continental United States.
Zhao did not immediately respond to a request for comment on the decision or whether he would appeal.
