Monday, May 20

Ex-Binance CEO Zhao’s Lawyers Urge U.S. Judge to Reject Travel Restrictions in Money Laundering Case

NY, 25th November 2023: Lawyers representing former Binance CEO Changpeng Zhao are requesting the U.S. Department of Justice to allow him to return to his residence in the United Arab Emirates until he sentence for violating anti-money laundering regulations.

In a Thursday motion, Zhao’s legal team urged U.S. District Judge Richard Jones in Seattle to uphold the bail conditions set by a magistrate judge, which would permit Zhao to leave the United States while awaiting his sentencing.

Changpeng Zhao, a citizen of both the UAE and Canada, resigned as the CEO of Binance after pleading guilty to knowingly causing the global cryptocurrency exchange to fail in maintaining an effective anti-money laundering program.

U.S. authorities have accused Binance of violating U.S. anti-money laundering and sanctions laws, pointing out the absence of reporting over 100,000 suspicious transactions associated with organizations classified as terrorist groups, such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria (ISIS). As part of a plea agreement, Binance agreed to a penalty of more than $4.3 billion. Furthermore, Changpeng Zhao has consented to pay a substantial fine of $150 million to the U.S. Commodity Futures Trading Commission. Prosecutors, in a filing on Wednesday, indicated that he could face a prison term of up to 18 months.

The U.S. Justice Department appealed to Judge Jones to reverse the decision made by U.S. Magistrate Judge Brian Tsuchida, which permitted Changpeng Zhao to return to the UAE ahead of his scheduled sentencing on February 23, on a bail bond of $175 million. The government expressed concerns over Zhao’s potential noncompliance with returning to the U.S. for sentencing, citing the absence of an extradition treaty between the UAE and the United States, as well as the defendant’s significant assets as a multi-billionaire.

However, Zhao’s legal representation strongly contends that their client has demonstrated a lack of flight risk. They highlighted his voluntary arrival in the U.S. to accept responsibility for his actions and the significant bail package he agreed to. Moreover, they emphasized the importance of allowing Zhao to return to the UAE to care for his partner and three children before his sentencing.

In response, the Justice Department filed a brief on Friday, asserting that its decision during Tuesday’s hearing to recommend keeping Zhao free prior to sentencing was an “exceptional” measure. Their recommendation was based on the belief that the risk of flight posed by Zhao could be effectively managed by imposing travel restrictions.

According to Justice Department lawyers, under normal circumstances, detaining a defendant with billionaire status who has pleaded guilty, faces potential imprisonment, and resides in a non-extradition country would be the standard procedure.

As the legal battle unfolds, the fate of Binance’s former CEO hangs in the balance. While Changpeng Zhao’s defense lawyers persistently argue for the removal of travel restrictions, the U.S. government highlights the potential challenges in ensuring his return if he opts to stay in the UAE due to the absence of an extradition treaty and his substantial wealth.

The final decision lies with U.S. District Judge Richard Jones, who will ultimately determine the course of action in this high-profile money laundering case involving Binance CEO Zhao.