Attorneys representing Changpeng Zhao, the ex-CEO of Binance, are pressing a U.S. judge to dismiss the Justice Department’s plea to prevent him from going back to his residence in the United Arab Emirates before his sentencing for breaching anti-money laundering regulations.
In a filing on Thursday, Zhao’s legal team requested U.S. District Judge Richard Jones in Seattle to uphold the bail terms established by a magistrate judge on Tuesday, which permit Zhao to depart the U.S. as he awaits his sentencing.
Zhao, who holds citizenship in both the UAE and Canada, resigned as Binance’s CEO on Tuesday following his admission of guilt for deliberately causing the prominent global cryptocurrency exchange to neglect to establish an effective anti-money laundering program.
According to U.S. officials, Binance violated American anti-money laundering and sanctions laws and neglected to report over 100,000 dubious transactions involving entities that the U.S. has identified as terrorist groups, including Hamas, al Qaeda, and the Islamic State of Iraq and Syria.
Under the terms of a plea agreement, the company consented to a payment exceeding $4.3 billion. Zhao has concurred to settle a $150 million fine with the U.S. Commodity Futures Trading Commission. In a filing on Wednesday, prosecutors indicated that he could face a maximum of 18 months in prison.
By Monday, the Justice Department has requested that Judge Jones overturn a ruling by U.S. Magistrate Judge Brian Tsuchida. This ruling permitted Zhao to travel back to the UAE before his sentencing on Feb. 23, following his agreement to a $175 million bail bond release.
The government expressed concerns that securing Zhao’s return for sentencing might be challenging if he decides not to come back to the U.S., especially since there is no extradition agreement with the UAE and considering Zhao’s status as a multi-billionaire with substantial assets.
However, Zhao’s legal team countered by stating that the ex-CEO had proven he wasn’t a flight risk by agreeing to a “significant” bail arrangement and voluntarily travelling to the U.S. to acknowledge his wrongdoing.
They argued that allowing Zhao to return to the UAE would enable him to look after his partner and three children and prepare them for his upcoming sentencing.
In a brief filed on Friday, the Justice Department responded, stating that its recommendation during Tuesday’s hearing to allow Zhao to remain free before sentencing was “exceptional.” This decision was based on the belief that the flight risk he posed could be “managed” by imposing travel restrictions.
The Justice Department’s lawyers noted, “In the vast majority of cases, a multi-billionaire defendant who has pleaded guilty, faces potential prison time, and resides in a country that does not extradite its citizens to the United States would be detained.”
