Nov 28, 2023

Binance founder Changpeng "CZ" Zhao must remain in the U.S., at least for the moment, as a federal judge considers a U.S. Department of Justice motion that would require him to remain in the country until he is sentenced early next year.

Video transcript

We recently learned that CZ must stay in the US for now while a judge considers a motion that would require him to remain in the country until his sentencing. This after pleading guilty to violating the Bank Secrecy Act and stepping down as CEO of finance last week joining us now to discuss is Coin Desk, global policy and regulation, managing editor Nick Day, who is also the editor of Coin Desk's state of crypto newsletter. Nick. Good morning. Good morning to you. Good morning. All right. So a lot has happened since we went off for the Thanksgiving holiday. Uh Now there's some back and forth with CZ over whether or not he should remain in the United States unpack what's going on for us. Yeah. So, you know, as we all noticed, uh about a week ago today, a week ago today, actually, uh CZ pled guilty to one charge of violent in the uh Bank Secrecy Act, uh and is scheduled for sentencing in February of 2024. So as of right now, um he's looking at, you know, potentially up to a year and a half in prison as well as a $50 million fine that he agreed to pay. And prosecutors want him to stay in the US ahead of his sentencing because they are concerned that if he returns to the UAE where he lives, he will not come back to the US to serve a sentence. Uh, his attorneys say that, you know, uh not a fair assessment. They say that, you know, the fact that CZ has already come to the US just to plead guilty shows that he is, you know, willing and wants to put this entire thing behind him. And so, you know, there's no reasonable concern that he will not return to the US. Uh And as you mentioned, a federal judge overseeing the case has at least for a moment, uh you know, directed at CZ State in the US until he can make a ruling on these competing motions. It wasn't part of the original agreement. Was it to, uh, that, that I, I, in other words, they didn't agree originally to say, yeah, you can go back to the eu uh sorry to the UAE. Um And then they just kind of said, ah, just kidding. Uh or, I mean, do we know anything about that? It doesn't look like based on just the court filings that I've seen that the, you know, specifics of that part were really in the package, you know, that the plea agreement was around, the plea was mostly focused on, uh, you know, easy pleading guilty. Um waiving uh is, you know, right to an improper indictment. Um You know, one thing, one of the more interesting things about this case is, uh there was no grand jury indictment, this was something else, uh like slightly different process. Um CZ would, you know, uh he can appeal any sentence longer than 18 months, he's gonna agree to pay the fine. Um So all those details seem to have been worked out the actual, you know, bond package because CZ is released on bond, he's not in jail. And prosecutors say they don't plan to ask for him to be in jail. Uh That seems to have been real worked out through the course of the hearing last. Now, uh and Nick just off the back of Lawrence's questions, it was my understanding that the terms of his original bond didn't require him to stay in the US. And so that's what this back and forth is now, but there's 100 and $75 million bond up for stakes if he were to decide to go anywhere that he is a citizen of the UAE or Canada and decide not to make it back uh for his sentencing. Correct? Yes. But here's where the prosecutors made, you know, it was a pretty interesting admission last week. They say that, you know, while yes, there is a $175 million bond because most of these assets are outside the US and in the UAE, they're not sure that they could actually collect on that. Should he run? Um So in terms of, you know, real dollar value, what they're saying is he's put up 15 million in a trust account in the US, in uh you know, Davis brighter uh trust account. Um They have about $5 million worth of collateral put up by three different characters. And so that, you know, roughly 12 $20 million maybe they could seize, but the bulk of the bond they think they probably would not be able to seize. Should he run? Uh One of the other arguments they made is that CZ has, you know, so many assets left over that he could probably afford to pay off the 20 million in assets that are, you know, currently put up without missing it. All right, Nick. So what happens next? What, how long is CZ waiting for a judge to make a decision here that's up to the judge? We'll be monitoring the docket. Uh There wasn't any kind of timeline put forth yesterday on a, whether there would be a hearing about this issue or b if the judge planned to make a ruling just based on the, you know, written submissions so far. Uh So we'll keep an eye on that. My guess is it'll probably happen sooner than later. This is, you know, kind of uh almost a procedural issue, right? Just is he allowed to go back to the UAE ahead of February 23rd, uh or not. So, I'm guessing we won't have to wait too long to get a ruling or at least, you know, a hearing on this. And then, um, after that, we'll see, it'll depend. All right, Nick, thanks for that update and thanks for joining us this morning. Thank you that Coin Desk, global policy and regulation managing editor Nick Day and don't forget to sign up for the state of crypto newsletter on

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