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Ex-Binance CEO Must Surrender Travel Documents, US Prosecutors Say

Legal tightening on Changpeng Zhao’s travels abroad

The United States Attorney’s Office has escalated legal pressures on Changpeng “CZ” Zhao, the former CEO of cryptocurrency exchange Binance, amid his awaiting sentencing. On February 23, a request was made to a federal judge in the U.S. District Court for the Western District of Washington, spotlighting the government's stance on Zhao's freedom of movement. U.S. Attorney Tessa Gorman proposed stringent conditions for CZ's bail.

Under the proposed conditions, Zhao is to confine his movements to the continental United States until his sentencing hearing scheduled for April 30. 

“Prosecutors asked Zhao to stay within the continental U.S. until his sentencing hearing on April 30 and give three days’ notice for any travel to allow the government to raise objections.”

This development follows the earlier denial of Zhao’s request to travel to the United Arab Emirates, indicating a tightening grip on his pre-sentencing liberties.

The request extends to Zhao’s Canadian passport, along with “all other current and expired passports and travel documents,” signifying an exhaustive measure to mitigate flight risks. Zhao, holding dual citizenship in Canada and the United Arab Emirates, finds his international mobility curtailed, a situation his counsel is anticipated to challenge.

Zhao’s legal struggle and Binance’s regulatory woes

The legal challenges facing Changpeng Zhao extend beyond stringent travel restrictions, as he grapples with the consequences of his actions at the helm of Binance. Zhao pleaded guilty in November 2023 to failing to establish an effective Anti-Money Laundering (AML) program at the cryptocurrency exchange, a plea that has placed him under intense scrutiny. The severity of this oversight was met with a substantial bail condition, with Zhao remaining free on a $175 million bond, illustrating the legal system's stringent stance on financial regulatory compliance.

CZ BNB (@cz_binance):

“Appreciate the support. But will try to stay off twitter for a while.” https://t.co/ApqEOzXHIa

 

The fallout from these legal entanglements has had profound implications for Binance, culminating in a $4.3 billion agreement with U.S. authorities. This agreement saw Zhao stepping down from his leadership role, marking a significant transition in the exchange's executive suite. On February 23, the acceptance of a $1.8 billion fine alongside the forfeiture of $2.5 billion underscored the financial repercussions for Binance.

The narrative of Binance's regulatory saga is further complicated by ongoing civil litigation. The U.S. Securities and Exchange Commission's lawsuit filed in June 2023 paints a broader picture of the regulatory challenges facing the crypto industry. 

Judge Jones at the Feb. 23 hearing:

“This really is a case where the ethics of the company were compromised by greed,”