While Changpeng Zhao, founder of cryptocurrency exchange Binance, awaits sentencing in April for violating the federal anti-money laundering law, U.S. prosecutors have asked the judge to impose stricter bail conditions, according to court filings.
Zhao pleaded guilty in late November to failing to maintain an effective anti-money laundering program, in violation of the Bank Secrecy Act. He also resigned as CEO of Binance.
The newly proposed bail conditions require Zhao to give at least three days' notice to prosecutors and pre-trial services before any domestic travel, giving them time to raise any possible objections. Zhao will also be required to surrender his current Canadian passport and will be barred from applying for a new passport without the court's permission. He will also be prohibited from changing his place of residence without prior approval.
Zhao's lawyers objected to the proposal, according to the lawsuit.
In mid-December, Judge Richard Jones barred Zhao from traveling outside the United States, citing Zhao's “tremendous wealth” and lack of ties to the United States as factors that could cause Zhao to flee if he were allowed to return to his home in the United Arab Emirates.
In the latest application filed by prosecutors in the US District Court in Seattle, it was noted that pretrial services officers recommended that Zhao be further restricted in his movements, allowing him to travel only to the western region of Washington and the area where he currently resides.
According to a footnote in the filing, Pretrial Services also recommended a “location monitoring requirement.” However, the judge is not explicitly asked to apply this condition in the application.
Zhao, a Canadian citizen, is currently free in the United States on a $175 million personal recognizance bond. His lawyers argued that Zhao took responsibility for his actions, noting that he paid a $150 million personal penalty to the U.S. Commodity Futures Trading Commission as part of his agreement with the government.
The Justice Department announced Zhao's guilty plea along with Binance's agreement to pay more than $4.3 billion to settle multiple federal charges. Attorney General Merrick Garland called it “one of the largest corporate penalties in U.S. history” at the time.
Federal sentencing guidelines indicate Zhao could face up to 18 months in prison. However, prosecutors were reportedly considering requesting a harsher sentence.
*This is not investment advice.