CZ from Binance: U.S. DOJ Considers Manageable Flight Risk

The U.S. Department of Justice (DOJ) is currently in a legal dispute over whether the former CEO of Binance, Changpeng 'CZ' Zhao, should remain free until his sentencing, under the condition that he stays within the United States. The department is navigating the delicate balance of not immediately incarcerating Zhao while expressing opposition to him leaving the country, citing concerns of him being a "flight risk that could be managed."

In a recent legal proceeding, CZ's legal team argued that his voluntary appearance in a U.S. court, despite being a non-U.S. citizen holding passports from the UAE and Canada, is indicative that he is not a flight risk. The filing from last week highlighted Zhao's voluntary surrender, his expressed intent to resolve the case, and a substantial bail proposal. Judge Tsuchida, based on these factors, concluded that Zhao does not pose a flight risk, even if he were to reside in the UAE.

However, U.S. Attorneys are countering this argument by suggesting that the severity of the potential sentence might serve as an incentive for Zhao to flee back to the UAE, especially since there is no extradition treaty between the UAE and the U.S. Prosecutors contend that Zhao, as a citizen of the United Arab Emirates, has "minimal ties to the U.S." and might not return if granted permission to leave.

The legal filing emphasizes that sentencing guidelines allow for a maximum of ten years, and the U.S. has the authority to advocate for any sentence up to that limit. Prosecutors assert that the significant penalties Zhao faces could motivate him to evade justice, supporting the proposed restrictions by the United States.

On Tuesday, Zhao took the step of pleading guilty to violating anti-money laundering laws in the U.S. and subsequently resigned as the CEO of Binance. In parallel, Binance itself pleaded guilty to a range of criminal and civil charges, agreeing to pay an imposing $4.3 billion in penalties. This financial penalty is noteworthy, ranking among the most substantial corporate fines in the history of the U.S. Department of Justice. Meanwhile, another former executive of the exchange, Sam Bankman-Fried, remains in custody, awaiting his sentencing.

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