On Thursday, a federal judge ruled that the founder of crypto exchange Binance, Changpeng Zhao, cannot leave the United States.
According to the judge, the former CEO of Binance needs to stay in the US until he is sentenced on criminal charges for violating anti-money laundering policies.
The order
The federal prosecutors had requested that travel restrictions be imposed on Zhao and it was granted by US District Judge Richard Jones.
Previously, Zhao had managed to secure a separate ruling, which had permitted him to return to his home in the UAE before his sentencing in February.
Jones reversed that decision and said that the fact that there is no extradition treaty between the USA and the UAE and the ‘enormous’ wealth that Zhao possesses makes him a flight risk.
In his ruling, the judge said that the Court and the Government were in agreement over the matter that the case was rather unusual.
He said that the defendant does not have any ties to the United States and has a considerable amount of property and wealth abroad.
The situation
A Chinese-Canadian entrepreneur, Zhao established Binance, which is the largest crypto exchange in the world.
Last month, he pled guilty to charges of not effectively maintaining anti-money laundering policies on his platform.
Under the federal sentencing guidelines, he could be sentenced to prison for 18 months. Prosecutors have argued that the 45-year old billionaire needs to stay in the US.
They have said that he could flee easily and bear the financial losses associated with the loss of his bond worth $175 million and collateral of $5 million.
They also said that it was possible that due to his residency status and citizenship in the United Arab Emirates, the government there might decide to shield him.
The arguments
Zhao’s lawyers had tried to downplay the concerns of the prosecutors, emphasizing the fact that had admitted to wrongdoing and surrendered willingly.
Meanwhile, the government has asserted that the billionaire would be fine. As per the bond conditions, he is free to travel within the United States and his family can also visit him in the country.
The judge said that these impositions were not burdensome on the freedom of the defendant before his sentencing.
While the judge favored the government, he did add that he had not taken this decision due to the citizenship of the defendant.
In 2017, Zhao helped launch Binance and relocated the company’s operations to Malta and the Cayman Islands.
The exchange has been investigated by the US authorities for facilitating illegal transactions. Binance had agreed to pay fines worth millions last year for illicit activity and anti-money laundering violations.
No charges had been filed against anyone until this year in November when Zhao was indicted. The US District Judge Richard A. Jones had previously permitted Zhao to go back to the UAE to his family.
But, federal prosecutors had warned that he would attempt to flee, given that there is no extradition treaty with the UAE and the wealth he possesses.