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CZ Confined To US, May Face 10 Years
The assumption that CZ would spend only months in jail in the US are looking less likely.
The situation has dramatically shifted for former Binance CEO, Changpeng "CZ" Zhao.
Last week, Zhao entered a plea deal with the US Department of Justice that saw him step down from his leadership at the world's largest crypto exchange, paying a $50 million fine and agreeing to have no role in the organization for three years. As part of the deal, it appeared that CZ's jail time for violating the Bank Secrecy Act would be limited to 18 months. With sentencing taking place in February next year, he planned to return to UAE, where he lives and has family.
The US authorities, however, now have other ideas.
Deeming that CZ poses a flight risk, at the end of last week prosecutors moved to prevent him from leaving the country. Since the UAE has no extradition treaty with the US, if he chose not to return for sentencing, it could be difficult to force him to come back. CZ might choose to forfeit his $175 million bail in return for a shot at freedom.
Moreover, the idea that he might only spend 18 months in jail is now looking less likely.
The terms of the deal state that he will not appeal any sentence less than 18 months. However, the tariff for his crimes could be anything from a few months to 10 years. There is increasing talk that prosecutors might aim for a longer sentence, which better reflects the severity of the crimes he committed and facilitated. John Reed Stark comments, former chief of the SEC's Office of Internet Enforcement, comments:
To me, CZ’s crimes are not regulatory parking tickets but are tantamount to mass murder and mayhem, and his wealth and special citizenship in a non-extraditing country render CZ a legitimate flight risk.
While CZ would be able to appeal a longer sentence, this might explain why the authorities do not want him to leave the US before sentencing. Faced with a significant stretch of time behind bars, the prospect of spending the equivalent of $17.5 million per year to remain at liberty might seem very appealing.
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