CZ Barred from UAE Trip Amidst Binance's $4.5B Equity

• Binance Founder Faces Legal Challenge as US Judge Denies Travel Request
• Offer and Rejection
• Judge's Concerns
• Legal Background
• Implications for the Cryptocurrency Sector

Binance Founder Faces Legal Challenge as US Judge Denies Travel Request

Changpeng "CZ" Zhao, founder of Binance, recently suffered a legal setback when his request to travel to the United Arab Emirates (UAE) was denied by a federal judge. Despite offering $4.5 billion in Binance equity as a guarantee for his return, Zhao's plea was turned down. This incident is the latest in a series of legal difficulties faced by Zhao following his guilty plea related to anti-money laundering (AML) issues at Binance, the world's leading cryptocurrency exchange.

Offer and Rejection

According to court records, on December 22, Zhao's legal team submitted a letter to Judge Richard Jones detailing Zhao's request to visit the UAE for one to four weeks. The intention of the trip was to support an undisclosed person undergoing hospitalization, surgery, and recovery. The identity of this person has been redacted in the filed documents. Despite Zhao resigning from his role as Binance CEO after admitting guilt, he proposed $4.5 billion in Binance equity, calculated according to the company's valuation from its last fundraising round two years ago, as a guarantee for his return. However, federal prosecutors opposed the request, and Judge Jones denied Zhao's application to travel during a closed hearing on December 29. This is the second time the judge has rejected such a request, citing concerns about Zhao's substantial wealth and potential flight risk.

Judge's Concerns

In an extensive order issued on December 7, Judge Jones voiced doubts about allowing Zhao to travel to the UAE. He pointed out Zhao's "enormous wealth and property abroad" and the lack of substantial ties to the United States. Further, the fact that Zhao's family resides in the UAE, along with his seemingly privileged status in the country, raised further concerns about the possibility of Zhao fleeing upon return to the UAE.

Legal Background

Zhao had previously pleaded guilty in a Seattle federal court for failing to implement an effective anti-money laundering program at Binance. To settle the case, the cryptocurrency exchange agreed to pay $4.3 billion in penalties. Zhao is expected to face sentencing on February 23 but has so far remained free in the U.S. under a $175 million release bond.

Implications for the Cryptocurrency Sector

The refusal of Zhao's travel request, despite the substantial offer of Binance equity as security, highlights the complex legal issues prominent figures in the cryptocurrency sector often encounter. As Zhao's sentencing date nears, this case provides important insights into the intricate relationship between cryptocurrency, regulatory compliance, and individual legal considerations.

Edited by Jonathan Stoker