Binance Founder Changpeng Zhao Faces Tightened Bond Conditions Ahead of Sentencing for Anti-Money Laundering Violation
Changpeng Zhao, the billionaire founder and former CEO of Binance, is facing tightened bond conditions as he awaits his sentencing in April for breaking a federal anti-money laundering law. U.S. prosecutors have requested a judge to impose stricter conditions on Zhao’s bond, according to court filings.
In late November, Zhao pleaded guilty to a charge of failure to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act. As part of his plea, he stepped down as Binance’s CEO. Now, prosecutors are seeking to ensure that Zhao adheres to certain restrictions while awaiting his sentencing.
Under the proposed bond conditions, Zhao would be required to provide prosecutors and pretrial services with at least three days’ notice before any travel within the country. This would give them time to raise any potential objections. Additionally, Zhao would have to surrender his current Canadian passport and would be barred from applying for a new one without the court’s permission. He would also need prior approval to change his place of residence.
However, Zhao’s lawyers have objected to these proposed conditions. It is unclear at this time how the judge will rule on the matter. Zhao’s attorney has not yet responded to CNBC’s request for comment.
This request for tightened bond conditions comes after Judge Richard Jones barred Zhao from traveling outside the United States in mid-December. The judge determined that Zhao’s significant wealth and lack of ties to the U.S. posed a flight risk if he were allowed to return to his home in the United Arab Emirates.
The latest filing by prosecutors also mentioned that pretrial services officers have recommended further restrictions on Zhao’s movement. They suggest allowing him to travel only to the western district of Washington and the district where he currently resides. The filing also hinted at a potential location-monitoring condition, although it does not explicitly ask the judge to impose it.
Zhao, a Canadian national, is currently free in the U.S. on a $175 million personal recognizance bond. His attorneys have argued that he has taken responsibility for his actions and is paying a personal penalty of $150 million to the U.S. Commodity Futures Trading Commission as part of his agreement with the government.
The guilty plea by Zhao was announced by the Department of Justice alongside an agreement by Binance to pay over $4.3 billion to resolve multiple federal charges. Attorney General Merrick Garland referred to it as “one of the largest corporate penalties in U.S. history.”
Federal sentencing guidelines suggest that Zhao could face up to 18 months in prison. However, prosecutors have reportedly considered asking for a harsher sentence. The final decision will be made by the judge during Zhao’s sentencing in April.
In a letter to the court, which was made public with redactions in late January, Zhao had requested permission to return to the UAE for up to four weeks to attend to someone in his life who was scheduled to undergo surgery. To address concerns about flight risk, Zhao offered to pledge all of his equity in Binance US, which was valued at $4.5 billion at the time, according to his lawyers.
However, Judge Jones denied the travel request on December 29, indicating that he deemed it necessary for Zhao to remain in the U.S. until his sentencing.
As the legal proceedings continue, the fate of Changpeng Zhao and the future of Binance remain uncertain. The outcome of his sentencing will have significant implications for both Zhao and the cryptocurrency industry as a whole.
