The US federal prosecutors are seeking the court's permission to stop Changpeng Zhao, the Founder and former CEO of Binance, from leaving the country, citing an "unacceptable risk of flight."

Zhao Pleads Guilty to a Criminal Charge

Zhao pled guilty on Tuesday in US federal court for violating the Bank Secrecy Act with his crypto exchange business. He is facing a maximum prison time of 8 months and is now awaiting his sentencing.

Following his guilty plea, Zhao signed a $175-million bond agreement, putting up $15 million in a trust account, and also found guarantors for the additional funds. Although he is now allowed to leave the US, he needs to return to the US two weeks before his sentencing scheduled in February 2024.

A subsequent motion filed by the US prosecutors argued that Zhao "presents an unacceptable risk of flight and nonappearance if he is allowed to leave the United States pending sentencing." The prosecutors further highlighted that if Zhao decides not to return for the sentencing, they "would not be able to secure his return."

"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," the motion stated.

Zhao, a citizen of Canada, is a resident of the UAE, a country that does not have any extradition treaty with the US. Further, most of Zhao's assets are outside the US jurisdiction so the US prosecutors couldn't secure the $175 million bond.

Binance Leaves the US

Zhao ran Binance since he founded the exchange in 2017 but has now stepped down from the apex role in agreement with his guilty plea deal. Binance, the largest cryptocurrency exchange in terms of trading volume, also settled with the US Justice Department by paying more than $4.3 billion. The exchange further paid an additional $2.8 billion to the US commodities regulator to settle other civil charges.

In addition to the penalty, Binance agreed to exit the US market and will be monitored for five years. The exchange also appointed a new CEO with an internal promotion.

Meanwhile, Binance continues to fight the Securities and Exchange Commission against 13 charges, including the allegation of commingling& customers' funds with its own.

This article was written by Arnab Shome at www.financemagnates.com.

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