A federal judge in Seattle ruled on Thursday that the founder and former CEO of Binance, who’s awaiting sentencing after pleading guilty to money laundering charges, must remain in the country.
The order came after the Justice Department appealed a magistrate judge’s earlier ruling that Changpeng Zhao—known as “CZ” in the crypto world—could return to the United Arab Emirates pending his sentencing hearing scheduled for February.
In his ruling, U.S. District Judge Richard Jones wrote that it was unusual to overturn a magistrate judge’s presentencing ruling, but that he had been persuaded by the Justice Department’s argument Zhao was a flight risk. Jones noted that the $175 million bond posted by Zhao was “substantial, if not unprecedented,” but that the Binance founder’s immense wealth meant he might be willing to forfeit the bond in return for his freedom.
“The government’s fear is supported by its belief that the vast majority of the defendant’s wealth is held overseas and the belief that he has access to hundreds of millions of dollars in accessible cryptocurrency,” wrote Jones.
Zhao is facing a maximum of 18 months in prison over the money laundering charges, which stem from Binance’s allegedly turning a blind eye to criminal transactions on its platforms. In one of the largest corporate fines in U.S. history, Binance last month agreed to pay over $4 billion to settle the charges while Zhao agreed to pay $50 million personally.
Zhao, who’s long treated Binance as a stateless entity, is a citizen of Canada, where he moved when he was 12 years old, but no longer has ties to the country. In his ruling, Jones cited an unverified claim by the Justice Department that Zhao was offered citizenship by the UAE as further evidence he might be a flight risk—and would avail himself of the country’s lack of an extradition treaty with the U.S. The judge also emphasized that Zhao is a “multibillionaire” and that his family resides in the UAE.
Jones did, however, state that Zhao posted no danger to the community and that he could remain at liberty pending his February sentencing hearing—provided he remain in the continental U.S.
Zhao did not immediately reply to a request for comment about the ruling or whether he would file an appeal.