Changpeng Zhao, also known as CZ, the founder of Binance, one of the largest cryptocurrency exchanges in the world, faced a significant setback when his request to travel to the United Arab Emirates (UAE) was denied by a federal judge. This article analyzes the details of the case and the reasons behind the judge’s decision.
CZ submitted a request to travel to the UAE, proposing to use his $4.5 billion stake in Binance as collateral. However, the judge rejected the request, citing concerns about his “enormous wealth” being a flight risk. This decision followed a previous denial in December, where the judge expressed concerns about his ties to the UAE and favored status. Despite the denial, CZ remains free on bond, albeit with travel restrictions.
In November, CZ pleaded guilty in a Seattle federal court for failing to maintain an effective anti-money laundering program at Binance. As a result, Binance agreed to pay $4.3 billion in penalties. Following the guilty plea, CZ stepped down as CEO, and his sentencing is scheduled for February 23. Despite the guilty plea and ongoing legal proceedings, CZ has remained free in the US on a $175 million release bond.
According to his lawyers, CZ requested permission to travel to Abu Dhabi for one to four weeks to be present for the hospitalization, surgery, and recovery of an undisclosed individual. The details of the medical procedure and the person’s identity were redacted in the filed letter. Notably, federal prosecutors did not give their consent to CZ’s travel request, raising further concerns.
Judge Jones justified the denial by mentioning CZ’s enormous wealth as a substantial flight risk. The judge expressed doubts about CZ’s ability to provide clear and convincing evidence that he would not flee if allowed to return to the UAE. This contrasts with other cases, such as former Celsius CEO Alex Mashinsky and former FTX CEO Sam Bankman-Fried, who were granted bonds but faced stricter travel restrictions.
The denial of the travel request for CZ, the founder of Binance, highlights the complexities and risks involved in his ongoing legal proceedings. Despite his significant stake in Binance and his plea of guilty, the judge deemed him to be a flight risk due to his wealth and ties to the UAE. This decision adds a layer of uncertainty to CZ’s future, as his sentencing approaches on February 23. It remains to be seen how this setback will impact Binance and its operations in the ever-evolving cryptocurrency industry.