Nov 27, 2023

The U.S. Department of Justice doesn't want Changpeng 'CZ' Zhao locked up until sentencing, but it doesn't want him to leave the United States either, arguing in a new filing that he's a "flight risk that could be managed."

Video transcript

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. Lawyers for former B CEO CZ are asking a judge to reject the justice department's request to bar him from returning to his home in the UAE until he is sentenced for violating anti money laundering laws. Joining us now to discuss is Coin desk's deputy managing editor on the global policy and regulation team, Jesse Hamilton Jesse, welcome. Thanks for having me. All right, Jesse a lot has been going on here. A lot of back and forth. There's a new filing from the DOJ saying that CZ doesn't need to be locked up until sentencing which is happening next year, but they don't want him to leave the United States. His co his team, of course, want him to be able to go home to his family, talk to us about what's going on here. Yeah. So, uh obviously, uh Binance case was a wild development heading into the US Thanksgiving holiday and I think we're all still reeling a bit. Uh But in this situation, as CZ awaits his, his US sentencing, which is very much out of his hands. He's standing by for the court to decide whether he can spend his next three months, uh, whether he can, uh, uh, whether you can turn to the UAE to wait or whether you'll have to, uh, to stay in the US until sentencing. So, the US Department of Justice, as you indicate, uh, is telling the court that it wants, uh, CZ to stay put. Uh, he's, he's not from here, they say, and he's, he's got passports from other countries making him a flight risk potentially. Uh But CZ actually, as we know, did show up, uh, voluntarily in Seattle to plead guilty and his lawyers are arguing that this suggests he can be trusted to appear again uh to accept his punishment. And if he doesn't, he forfeits 100 and $75 million bond, which is substantial. Uh It's, it's unclear uh what his sentencing may bring at this point. But the high end of the sentencing guideline guidelines would, would indicate as much as uh 18 months in prison. Uh And he's given up the ability to appeal. Uh The DOJ can argue for a much longer sentence of as long as a decade. What's the likelihood do you think the DOJ is going to argue for a longer sentence than 18 months? Uh It's, it's hard to say they'd always want to retain that, that leverage when, you know, dealing with a, a defendant in a case like this. Um And obviously, if, if they're going to be contemplating a very much longer sentence. Uh, that's, that's makes it even more urgent for them to want to keep him here because then he faces quite a bit more risk. All right. Now, while we're talking about likelihoods, what's the likelihood you've come across in your reporting and following the story very closely that he'll be able to return home to the UAE. Uh, during the next three months, we generally find judges don't like to take risks with ensuring a defendant shows up for a sentence. But, you know, this is an unusual and obviously high profile case. Uh The magistrate judge had initially said it was ok for CZ to go home. Uh And it's the DOJ S motion to keep him. Uh that's, that's now holding that up. Uh And we may hear back as soon as today on this decision actually. Um But it's hard to say whether the judge will be moved to change his mind. Uh The judge is not necessarily uh presenting, I mean, the DOJ rather is, is, isn't, isn't presenting any information the judge isn't already aware of. Uh, but the, the US has no extradition treaty with the UAE. So that tends to add to the stickiness of the situation. All right, we'll just have to wait and see what happens there. But in the meantime, Binance has a new CEO in Richard Tang. He's been doing, doing some media interviews out in the middle East. What do we know about him? Yeah, we, we actually just heard from Tang in a blog post uh that provides a sort of opening comment on his tenure. Uh He said the company has, in his words, uh turned the page on B's historical challenges and he says he's, he's wanting to focus on collaborating with policymakers on regulation. Uh 10 was himself a regulator in Abu Dhabi and Singapore. So he, you know, potentially come at this from uh that very different background than CZ. Uh Of course, you'll have some, some obvious hurdles to overcome with us authorities. Uh Certainly there will be some trust issues there and he's taken over the company. Uh that will be with official US ordered monitors, uh who will be looking over his shoulder all the time. All right, we'll keep following the story. I'm sure much more will unfold over the coming weeks and days. Jesse, thanks so much for joining and unpacking that. Thanks. That was Coin Desk's deputy managing editor on the global policy and regulation team. Jesse Hamilton.

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