Former Binance CEO Asks Judge to Permit Him to Leave US Before Sentencing

Mr. Zhao’s lawyers filed a motion asking a judge to deny the Justice Department’s request to bar him from leaving the United States while awaiting sentencing.
Former Binance CEO Asks Judge to Permit Him to Leave US Before Sentencing
Binance Co-Founder and CEO Changpeng Zhao speaks during a press conference at the Europe's largest tech conference, the Web Summit, in Lisbon on Nov. 2, 2022. PATRICIA DE MELO MOREIRA/AFP via Getty Images
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Lawyers for Zhao Changpeng, the founder and former CEO of the world’s biggest cryptocurrency exchange, Binance, asked a federal judge to allow him to leave the United States and return to his home in the United Arab Emirates (UAE) ahead of his sentencing on money-laundering charges.

Mr. Zhao’s lawyers filed a motion on Nov. 24 in the Western District of Washington in Seattle, asking U.S. District Judge Richard Jones to deny the Justice Department’s (DOJ) request to bar him from leaving the country while awaiting sentencing.
Mr. Zhao pleaded guilty to money-laundering charges, and agreed to step down and pay a $150 million fine, while Binance itself faces $4.3 billion in fines to settle criminal charges and must make a “complete exit” from the United States.

Prosecutors also seek an 18-month prison sentence for Mr. Zhao.

Following a years-long investigation into the company’s crypto exchange operations, Binance and Mr. Zhao agreed to enter into a plea deal with a range of U.S. federal agencies, including the DOJ and the Department of the Treasury.

Binance violated U.S. anti-money laundering and sanctions laws, failing to prevent and report more than 100,000 suspicious transactions with terrorist groups that include Hamas’s Al-Qassam Brigades, Palestinian Islamic Jihad, Al-Qaeda, and ISIS, according to the Treasury Department.

“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed—now it’s paying one of the largest corporate penalties in U.S. history,” Attorney General Merrick Garland said in a statement.

Leaving US While Awaiting Sentencing

In its Nov. 20 motion, the Justice Department asked Judge Jones to reverse a decision by U.S. Magistrate Judge Brian Tsuchida to allow Mr. Zhao to return home to the UAE ahead of his Feb. 23 sentencing after he agreed to release him on a $175 million bail bond.

The DOJ argued that Mr. Zhao, who holds dual citizenship in the UAE and Canada, poses a flight risk, as the United States has no extradition treaty with the UAE, so “the government would not be able to secure his return.”

He has strong connections to the UAE, as he has three children and a partner residing there. He’s also a multibillionaire with significant assets, and his bail package is “largely comprised of assets beyond the government’s reach,” according to the DOJ.

However, Mr. Zhao’s lawyers argued that the former CEO had demonstrated that he wasn’t a flight risk by agreeing to a “substantial” bail package and by voluntarily flying from the UAE to the United States “before the Court to accept responsibility and plead guilty” for his actions. He also directed his company, Binance, to plead guilty and pay a “historic” fine.

They noted that Binance “is the largest cryptocurrency platform by volume of trades in the world, and Mr. Zhao is its recognizable founder.”

“That global spotlight makes evasion of the U.S. justice system impossible,” his lawyers said.

Mr. Zhao’s defense team also argued that he might serve half of the proposed maximum 18 months imprisonment or even no jail time compared with “precedent in similar offenses.” If he flees, he risks facing additional charges.

“The fact that Mr. Zhao’s home and his family are in the UAE does not make him a flight risk, and preventing him from returning to them would be punitive,” his lawyers said.

“His family has recently grown, as he and his partner welcomed their third child a few months ago. Allowing Mr. Zhao to remain in the UAE will, in turn, allow him to take care of his family and prepare them for his return to the U.S. for sentencing.”

The Justice Department responded in a brief on Nov. 24 that its decision at the Nov. 21 hearing to recommend Mr. Zhao remain free before sentencing was “exceptional” and was only because it believed that the risk of flight he posed could be “managed” by restricting his travel.

“In the vast majority of cases, a multi-billionaire defendant who has pleaded guilty faces possible prison time and lives in a country that does not extradite its citizens to the United States would be detained,” Justice Department lawyers said.

In a separate move, on Nov. 20, the Securities and Exchange Commission announced charges against the popular San Francisco-based cryptocurrency platform Kraken for operating as an unregistered securities exchange and broker-dealer and reaping hundreds of millions of dollars in unlawful profits.

Reuters, Tom Ozimek, and Michael Washburn contributed to this report.
Aaron Pan
Aaron Pan
Author
Aaron Pan is a reporter covering China and U.S. news. He graduated with a master's degree in finance from the State University of New York at Buffalo.
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