A judge has decided that the ex-chief of Binance, Changpeng Zhao (CZ), must remain in the country while he awaits sentencing for federal crimes.
As part of its plea deal, crypto exchange Binance agreed to pay a $4.3 billion fine for skirting anti-money laundering checks; CZ agreed to step down as its CEO. Now, he faces up to 10 years behind bars.
US District Judge Richard Jones ruled on Monday that while awaiting sentencing in February, CZ cannot leave the country. Though he won’t spend his time in prison, he won’t be allowed to fly back home to Dubai.
CZ’s lawyers filed a motion on Thursday, arguing that he willingly showed up in court once and will therefore do it again. However, prosecutors argued that CZ poses a significant flight risk if allowed to leave since the majority of his wealth is outside of the country and the UAE has no extradition deal with the US. What’s more, the ex-Binance chief enjoys special status in the UAE after obtaining ‘citizenship by invitation.’
The Department of Justice (DoJ) believes CZ’s flight risk could be “manageable” if he was ordered to remain in the country. The DoJ doesn’t believe CZ needs to be detained while he waits, so long as he doesn’t leave the US.
CZ was originally expected to be sentenced to just 12-18 months for his crimes. However, the weekend filings show that the DoJ may push for a maximum sentence of 10 years — adding weight to its argument that CZ poses a flight risk.
“The defense claims that Mr. Zhao faces merely a “brief” sentence and has no incentive to flee,” the filing read. “The reality is that the top-end of the Guidelines range may be as high as 18 months, and the United States is free to argue for any sentence up to the statutory maximum of ten years.”
CZ’s sentencing hearing is scheduled for February 23, 2024. Binance’s daily volume has plummeted since the DoJ announcement, from $15 billion to close to $5 billion.