Lawyers for former Binance CEO Zhao Changpeng asked a federal judge to allow him to leave the United States and return to his home in the United Arab Emirates (UAE) before his sentencing for money-laundering charges.
Mr. Zhao’s lawyers filed a motion on Nov. 24 in the Western District of Washington in Seattle, asking U.S. District Judge Richard Jones to deny the Justice Department (DOJ)’s request to bar him from leaving the United States while awaiting sentencing.
Mr. Zhao, the founder of the world’s biggest cryptocurrency exchange, Binance, pleaded guilty to money-laundering charges and agreed to step down and pay a $150 million fine, while Binance itself faces $4.3 billion in fines to settle criminal charges and must make a “complete exit” from the United States.
Prosecutors also seek an 18-month sentence in prison for Mr. Zhao.
Following a years-long investigation into the crypto exchange operations, Binance and Mr. Zhao agreed to enter into a plea deal with a range of U.S. federal agencies, including the DOJ and the Department of the Treasury.
Binance violated U.S. anti-money laundering and sanctions laws, failing to prevent and report over 100,000 suspicious transactions with terrorist groups, including Hamas’s Al-Qassam Brigades, Palestinian Islamic Jihad, Al Qaeda, and ISIS, according to the Treasury Department.
“Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed—now it’s paying one of the largest corporate penalties in U.S. history,” Attorney General Merrick Garland said in a statement.
Leaving the United States While Awaiting Sentencing
In its motion on Monday, the Justice Department asked Judge Richard Jones to reverse a decision by U.S. Magistrate Judge Brian Tsuchida to allow Mr. Zhao to return home to the UAE ahead of his Feb. 23 sentencing after he agreed to release him on a $175 million bail bond.
The DOJ argued that Mr. Zhao, holding dual citizenship of the UAE and Canada, posed a flight risk as the United States has no extradition treaty with the UAE, so “the government would not be able to secure his return.”
Mr. Zhao’s strong connections to the UAE as he has three children and a partner residing there. Additionally, he is a multi-billionaire with significant assets, and his bail package is “largely comprised of assets beyond the government’s reach,” the DOJ said.
But Mr. Zhao’s lawyers argued that the former CEO had demonstrated he was not a flight risk by agreeing to a “substantial” bail package and by voluntarily flying from the UAE to the United States “before the Court to accept responsibility and plead guilty” for his actions. He also directed his company, Binance, to plead guilty and pay a “historic” fine.
They added that Binance “is the largest cryptocurrency platform by volume of trades in the world, and Mr. Zhao is its recognizable founder. That global spotlight makes evasion of the U.S. justice system impossible.”
Mr. Zhao’s defense team also argued Mr. Zhao might serve half of the proposed maximum 18 months imprisonment or even no jail time compared with “precedent in similar offenses.” If he flees, he risks facing additional charges.
“The fact that Mr. Zhao’s home and his family are in the UAE does not make him a flight risk, and preventing him from returning to them would be punitive.”
“His family has recently grown, as he and his partner welcomed their third child a few months ago. Allowing Mr. Zhao to remain in the UAE will, in turn, allow him to take care of his family and prepare them for his return to the U.S. for sentencing,” Mr. Zhao’s lawyers said
The Justice Department responded in a brief on Friday that its decision at Tuesday’s hearing to recommend Mr. Zhao remain free before sentencing was “exceptional” and was only because it believed the risk of flight he posed could be “managed” by restricting his travel.
“In the vast majority of cases, a multi-billionaire defendant who has pleaded guilty faces possible prison time and lives in a country that does not extradite its citizens to the United States would be detained,” Justice Department lawyers said.
In a separate move, on Monday, the Securities and Exchange Commission (SEC) announced charges against the popular San Francisco-based cryptocurrency platform Kraken for operating as an unregistered securities exchange and broker-dealer and reaping hundreds of millions of dollars in unlawful profits.
Reuters, Tom Ozimek, and Michael Washburn contributed to this report.
From The Epoch Times
