Binance Founder Gets Pushback from DOJ on Travel Restrictions

The ongoing legal saga involving Binance founder Changpeng ‘CZ’ Zhao has taken a new turn with the Department of Justice (DOJ) pushing for travel restrictions until sentencing and hinting at a possible 10-year prison sentence. Former SEC official John Reed Stark sheds light on the recent developments and explores the implications for the crypto industry.

The US DOJ Travel Restriction Argument

In a late Saturday night court filing, DOJ lawyers reiterated their stance that Zhao should be restricted to the Continental United States until sentencing and barred from traveling to his home in the United Arab Emirates (UAE). This comes as a response to Magistrate Judge Brian Tsuchida’s decision allowing CZ to travel to and live in the UAE until two weeks before his sentencing.

The DOJ expressed surprise at Judge Tsuchida’s decision, emphasizing that in most cases, a defendant of CZ’s stature, having pleaded guilty and facing possible prison time, would be detained or, at the very least, restricted from leaving the U.S. The DOJ also highlighted the interconnected nature of CZ and Binance, filing a felony charge against CZ for violating the Bank Secrecy Act, resulting in a $4.3 billion settlement for the exchange, the largest penalty in U.S. Treasury and FinCEN history.

Furthermore, the DOJ contends that CZ’s lack of ties to the U.S. and his family and wealth residing in the UAE pose a legitimate flight risk. The government argues that Zhao’s special status as a citizen of the UAE, obtained through invitation, could prevent his extradition back to the United States.

The government’s recent court filing revealed that, despite expectations of a 12–18-month sentence, they might argue for up to the statutory maximum of ten years at CZ’s sentencing.

The Road Ahead for Binance Founder

Looking ahead, the sentencing hearing of the Binance Founder is scheduled for February 23, 2024, though this date could change. The court’s decision on whether CZ can travel to the UAE before sentencing is expected soon.

As the legal drama unfolds, the ultimate outcome of the Binance debacle remains uncertain. Whether the DOJ has additional strategies up its sleeve or if its efforts in Binance monitoring will uncover more chargeable crimes is yet to be seen.

For now, the exchange is navigating a new era after Richard Teng, an experienced veteran in the financial ecosystem, was named as successor to the Binance Founder.

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Godfrey Benjamin
CoinGape