UAE-Canadian Billionaire Pleaded Guilty to Violating Anti-Money Laundering Requirements
Lawyers for former Binance CEO Changpeng Zhao have filed a petition requesting U.S. District Judge Richard Jones in Seattle to uphold a decision made by a magistrate judge on Tuesday that would permit Zhao to return to his home in the United Arab Emirates while awaiting his sentencing for violating anti-money laundering requirements.
The Justice Department, however, has opposed Zhao’s request, arguing that he poses a flight risk and should remain in the United States until his sentencing hearing scheduled for February 23, 2024.
Legal Background
Zhao, a citizen of the UAE and Canada, stepped down as CEO of Binance on Tuesday, November 21, 2023, after pleading guilty to willfully causing the global cryptocurrency exchange to fail to maintain an effective anti-money laundering program.
According to US authorities, Binance broke US anti-money laundering and sanctions laws and failed to report over 100,000 suspicious transactions with organizations deemed terrorist groups by the United States, including Hamas, al Qaeda, and the Islamic State of Iraq and Syria.
As part of a plea agreement, Binance agreed to pay a settlement of over $4.3 billion. Zhao has also agreed to pay a $150 million penalty to the US Commodity Futures Trading Commission and faces up to 18 months in prison.
Arguments in Favor of Zhao’s Return Home
Zhao’s lawyers have argued that the former CEO has demonstrated that he is not a flight risk by agreeing to a “substantial” bail package and by voluntarily coming to the United States to accept responsibility for his actions.
They further argue that allowing Zhao to return to the UAE would enable him to take care of his partner and three children and prepare them for his sentencing.
Justice Department’s Response
In a court filing on Friday, November 24, 2023, the Justice Department countered that its decision to recommend Zhao’s release before sentencing was “exceptional” and was solely based on the belief that the potential flight risk 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 asserted.
Next Steps
Judge Jones is expected to rule on Zhao’s request by Monday, November 27, 2023. His decision will determine whether Zhao will be allowed to return to the UAE or remain in the United States until his sentencing.
FAQ
Changpeng Zhao pleaded guilty to willfully causing the global cryptocurrency exchange Binance to fail to maintain an effective anti-money laundering program.
Changpeng Zhao faces up to 18 months in prison.
The Justice Department argues that Changpeng Zhao poses a flight risk and should remain in the United States until his sentencing hearing.
U.S. District Judge Richard Jones is expected to rule on Changpeng Zhao’s request to return home by Monday, November 27, 2023.
Changpeng Zhao agreed to a $175 million bail package.
Binance agreed to pay a settlement of over $4.3 billion.
