- Government prosecutors express concern over the former Binance boss Changpeng Zhao’s potential flight risk, seeking to block his departure from the United States.
- Prosecutors argue that Zhao’s ties and favored status in the UAE, coupled with the absence of an extradition treaty, make him a flight risk.
- Despite the legal challenges faced by Zhao, the crypto markets have rebounded.
In a recent development, the United States government has raised concerns about the former Binance CEO, Changpeng “CZ” Zhao, potentially leaving the country. The move comes as prosecutors’ express unease about the risk of his flight. Let’s take a deeper look at the facts of this news story.
Prosecutors Seek Review of Judge’s Decision
In a filing to a Seattle federal court on November 22, U.S. prosecutors urged a review and overturn of a judge’s decision. This decision granted Zhao permission to return to his residence in the United Arab Emirates (UAE) on a substantial $175 million bond. However, this freedom comes with the condition that he returns to the U.S. two weeks before his sentencing in February 2024.
The U.S. prosecutors, in their proposed order, asserted that Zhao “presents an unacceptable risk of flight and nonappearance if he is allowed to leave the United States pending sentencing.” They further expressed concerns about the difficulty in securing his return if he decides not to come back.
Concerns Over Ties and Extradition
In a detailed argument, the government pointed to Zhao’s significant ties and favored status in the UAE. The absence of an extradition treaty between the UAE and the U.S. adds weight to the government’s position to prevent 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 emphasized.
Prosecutors also highlighted the potential for Zhao to live on his considerable wealth in the UAE indefinitely. Given that a majority of his assets are held overseas, away from U.S. jurisdiction, the government argued that his bond was insufficient to ensure his return.
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CZ’s Admission and Industry Impact
It’s noteworthy that Zhao recently admitted to failing to maintain an effective Anti-Money Laundering program at Binance. As part of his plea agreement, he stepped down as the CEO of the exchange and agreed to pay a substantial $50 million fine.
Industry experts and observers view Binance’s settlement with the Justice Department as a positive outcome for the crypto industry. This development is seen as further legitimizing the industry in the United States.
Also Read: CZ Agreed to Step Down as Binance CEO as Part of $4B Case Settlement with US DOJ
Market Response and Conclusion
Despite the legal challenges faced by one of the crypto industry’s influential figures, the crypto markets have demonstrated resilience. The total market capitalization has already rebounded to pre-Binance news levels, reaching $1.48 trillion during the Thursday morning Asian trading session. CZ’s departure shook the crypto world but things are getting back to normal quicker than anticipated.
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