Prosecutors are seeking stricter bail conditions for Changpeng Zhao, the founder of Binance, while he awaits sentencing for money laundering charges. Zhao had previously pleaded guilty in November of last year and had agreed to step down as head of the company due to his failure to comply with anti-money laundering practices at his cryptocurrency exchanges.
Federal prosecutors are now requesting that Zhao give them at least three days’ notice before any domestic travel and surrender his Canadian passport, with the condition that he cannot apply for a new one without court permission. He would also be prohibited from changing his residence without approval.
The request was made as a judge approved Binance’s $4.3 billion deal with the U.S. government, which was made at the same time as Zhao’s guilty plea. The deal resolved ongoing investigations by the Justice Department related to the Bank Secrecy Act, failure to register as a money transmitting business, and other financial and regulatory violations.
In December, a court had deemed Zhao a flight risk and ordered him to remain in the U.S. until his sentencing, which was originally scheduled for Friday but has now been postponed to April.
Zhao’s lawyers argue that he is not a flight risk, citing his willingness to travel to the U.S. to enter his guilty plea and his intention to resolve the case. They also proposed a significant bail agreement. However, federal prosecutors argue that Zhao’s substantial wealth outside the country and close ties with the United Arab Emirates, which has no extradition treaty with the U.S., make him a flight risk.
Under federal sentencing guidelines, Zhao faces up to 18 months in prison, but the Justice Department may argue for a harsher penalty.
Despite Binance’s recent legal troubles, the company saw a 30% increase in its user base last year, welcoming 40 million new customers. According to Binance CEO Richard Teng, there was a significant increase in inflows from institutional investors.
