Changpeng “CZ” Zhao, former CEO of crypto exchange Binance, must stay in the United States for now, a federal judge ruled Monday. This comes after Zhao pleaded guilty last week to violating the Bank Secrecy Act.
The decision puts on hold an earlier ruling that would have allowed Zhao to return to his family in the United Arab Emirates while awaiting sentencing in February 2024. Prosecutors argued Zhao poses a flight risk, given his wealth and the lack of an extradition treaty with the UAE.
Last week, a DOJ spokesperson had earlier told Reuters that Zhao would remain in the Seattle area until Monday evening but would be allowed to return to the UAE.
Zhao resigned as Binance CEO after the company admitted to sanctions and money transmission violations. Binance agreed to pay a $4.3 billion penalty and bring on compliance monitors.
As part of his personal plea deal, Zhao put up $15 million and had guarantors offer $5 million in collateral for a $175 million bond. He also faces up to 10 years in prison and must pay a $50 million fine.
Defense attorneys claimed Zhao already demonstrated accountability by traveling to the U.S. They said his family cannot uproot their lives only for a sentencing hearing.
But Department of Justice officials convinced Judge Richard Jones that Zhao has ample means to flee despite the bond. Prosecutors are not seeking pre-sentencing detention, just requiring he stays in the country.
Jones did not indicate if or when he might schedule a bond hearing. Zhao’s sentencing is set for February 23, 2024. He can appeal any sentence over 18 months.
The judge’s detention order delivers the latest twist in an ongoing crypto saga that has rippled through the industry. For now, the embattled Zhao remains on U.S. soil.
Editor’s note: This article was written with the assistance of AI. Edited and fact-checked by Stacy Elliott.