Judge Refused CZ Offer Of $4.5bn Binance Stake In Exchange For Trip

Changpeng 'CZ' Zhao, legally-embroiled former CEO of crypto exchange Binance, was last month denied permission to leave the United States in spite of offering his $4.5billion Binance stake as bond, according to a court filing yesterday 24 January 2024.

Flight risk

Following an appeal to fly to the United Arab Emirates (UAE), CZ was denied the request and effectively barred from leaving the US ahead of his February sentencing hearing.

As per the original plea from his lawyers, CZ desires to travel to UAE “for one to for weeks”, which would allow him “to be present for the hospitalization and surgery of” a redacted individual. 

This was firmly denied by the judge, despite CZ offering up the entirety of his $4.5bn stake in Binance to “assure his timely return”. 

As per his $175m bond deal following his guilty plea in November 2023, CZ was permitted to leave the US at the time and was requested to return two weeks before the sentencing hearing. 

However, US authorities were quick to challenge this decision, describing him as a “substantial flight risk” due to his “significant assets, his strong ties to the UAE, and the government’s inability to extradite him from the UAE”. Therefore, it was ruled that he should not be allowed to leave the US before his sentencing.

The fall of CZ

As owner of the world's largest cryptocurrency exchange, CZ has been regularly in and out of legal troubles and disputes, but mostly in the United States.

You could argue that this wasn’t necessarily CZ's fault as the United States isn’t well-known for properly regulating cryptocurrencies. But it’s not as though he’s been playing by the rules either.

In 2019, Binance was banned in the US, to which CZ and investors responded to by creating a separate exchange that would comply with all US federal laws, Binance.US, although it remained banned in six states.

But following a string of leaked documents that allege an intentional plan to mislead US authorities, the Inland Revenue Service (IRS) and United States Department of Justice (DoJ) launched investigations in 2021, alleging tax and money laundering offences. 

These investigations deepened over the years with even greater allegations coming from other regulatory watchdog groups in the US government throughout 2023, namely the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Binance woes

On 21 November 2023, the DoJ Office of Public Affairs published a press release stating that Binance Holdings pleaded guilty to violations relating to “Bank Secrecy Act (BSA), failure to register as a money transmitting business, and the International Emergency Economic Powers Act (IEEPA).”

Binance agreed to pay a $4.3bn fine, CZ agreed to pay $50m and resign as CEO of Binance, although as part of the deal, he can maintain his ownership of the firm.

The release continues: “Binance’s founder and chief executive officer (CEO), Changpeng Zhao, a Canadian national, also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, in violation of the BSA and has resigned as CEO of Binance.”