Changpeng Zhao (CZ), the former CEO of Binance, is facing restrictions on leaving the U.S. before his sentencing in February for violating the Bank Secrecy Act, as per federal prosecutors’ filing on Wednesday. CZ had pleaded guilty and stepped down from his position on Tuesday.
Binance also admitted guilt to various criminal and civil charges related to inadequate customer verification and anti-money laundering measures, allowing U.S. users and those from sanctioned regions to use the platform without proper KYC and anti-money laundering programs.
A fine of $4.3 billion is going to be paid by Binance, marking one of the largest corporate fines by the U.S. Department of Justice. Prosecutors mentioned in Wednesday’s filing that Zhao, being a citizen of the United Arab Emirates (UAE), has “minimal ties to the U.S.”
They also stated that they are not asking for him to be sent to prison right away, but instead, they want a condition that requires him to remain in the United States. Zhao’s sentencing is scheduled for February 23, 2024, and he may be looking at a prison sentence of more than a year, along with a fine.
As per his existing bond agreement, Zhao has the option to leave the U.S. if he puts $15 million into a trust account, signs a $175 million personal recognizance bond, and gets additional funds from guarantors.
This is insufficient, prosecutors said in Wednesday’s filing. If Zhao did not return to the U.S., they wouldn’t be able to secure the $175 million bond as most of his assets are outside the country, and Zhao is wealthy enough that he could pay off the rest of the funds without an issue, they said. There also isn’t an extradition treaty between the UAE and the U.S.
Zhao is currently in the U.S. until at least Nov. 27. If District Judge Richard Jones chooses not to review the DOJ filing by 5:00 p.m. Pacific Time on that day, Zhao will be free to return to the UAE but must come back to the U.S. by Feb. 10.
Also Read: Binance CEO CZ’s Resignation Note, ‘Binance Will Be Fine’
