Judge bars Changpeng Zhao from leaving the United States until verdict is delivered

The U.S. court did not allow Changpeng Zhao (CZ) to return to the UAE before consideration of the Justice Department’s motion, which seeks to bar the former Binance chief from leaving the country due to flight risk.

Judge Richard A. Jones upheld the ruling of colleague Brian Tsuchida that allowed CZ to return to his family in Dubai. He limited this option until the aforementioned motion by the United States government is considered.

On November 21, in the course of the deal with the agency, the exchange paid $4.3 billion, and CZ agreed to a $50 million penalty and to step down as chief executive.

He posted a $175 million bond to remain free until the verdict on February 23, 2024. However, prosecutors sought to bar the former head of the platform from leaving the United States, citing flight risk. As risks they cited substantial wealth abroad and limited ties to the country.

The prosecution then stated that the former Binance chief did not present clear and convincing evidence that he would not flee if he returned to the UAE.

On November 23, lawyers challenged the motion to bar Zhao from leaving the United States.

On November 26, the U.S. Department of Justice clarified that until the court’s decision CZ must remain free, but not leave the United States due to “controlled flight risk”. Unlike the previous motion, prosecutors stated clearly and unambiguously that when a verdict is rendered they may insist that Zhao be sentenced to ten years in prison.

According to The Wall Street Journal, SEC continues to seek evidence of the existence of a mechanism by which Binance and CZ control assets at Binance.US. The agency is concerned that the exchange could misappropriate the crypto belonging to its American subsidiary, using “FTX-style” fraud.

A Binance.US lawyer Matthew Laroche urged a federal judge to halt the SEC’s investigation into possible fraud. In June the regulator brought 13 charges against the platform, including “mixing” client assets “at will” thanks to the “secret control” of the American subsidiary.

During the November 27 hearing, Binance.US representatives noted that the SEC has no evidence of potential fraud.

The judge agreed that the deal between the exchange and U.S. authorities reduces the likelihood of Binance and CZ misappropriating client funds. He ordered the parties to resolve the dispute by December 15.

Following Zhao’s resignation, Richard Teng took over as the organization’s chief executive.

In a special report ForkLog examined the new exchange chief’s track record and found how former colleagues evaluate the platform’s prospects under his leadership.