Crypto

CZ an ‘unacceptable risk of flight,’ should stay in US: DOJ

United States government prosecutors are trying to stop former Binance boss Changpeng “CZ” Zhao from leaving the country, expressing concern about his potential flight risk.

In a Nov. 22 filing to a Seattle federal court, U.S. prosecutors requested a review and overturn of a judge’s decision that would allow Zhao to return to his home in the United Arab Emirates (UAE) on a $175 million bond under the condition he returns to the U.S. two weeks before his February 2024 sentencing.

In a proposed order, U.S. prosecutors wrote Zhao “presents an unacceptable risk of flight and nonappearance if he is allowed to leave the United States pending sentencing.”

In an accompanying letter, prosecutors said if Zhao decided not to come back to the U.S., then the government “would not be able to secure his return.”

In its argument, the government pointed to Zhao’s ties and favored status in the UAE along with the country’s lack of an extradition treaty with the U.S. as reasons to block him from leaving the country.

“He has three young children and a partner in the UAE; once in the UAE and faced with the prospect of traveling back to the United States to face up to 18 months in prison, he may elect to instead simply stay in the UAE with his family.”

Prosecutors said Zhao could live on his wealth in the UAE indefinitely as a vast majority of it is held overseas away from U.S. jurisdiction.

Excerpt of the motion to review Zhao’s bond conditions. Source: PACER

The government also argued Zhao’s bond was inadequate as a majority of the $175 million used to secure his release was outside the reach of the U.S.

Zhao recently confessed to failing to maintain an effective Anti-Money Laundering program at Binance and part of his plea agreement saw him step down as CEO of the exchange and pay a $50 million fine.

Related: Binance’s DOJ settlement offers a glimmer of hope for the crypto industry

Industry experts and observers have argued that Binance’s settlement with the Justice Department is a positive outcome for the crypto industry, further legitimizing it in the U.S.

Additionally, crypto markets have already rebounded from the bad news regarding one of the industry’s most enigmatic and influential players.

Total market capitalization has already returned to pre-Binance news levels, hitting $1.48 trillion during the Thursday morning Asian trading session.

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