Prosecutors want to keep Binance's CZ under stricter restrictions before sentencing

Changpeng Zhao, founder and CEO of Binance, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris on June 16, 2022.

Benoit Tessier | Reuters

US prosecutors on Friday asked a judge to tighten the terms of the billionaire's bonds Binance Company founder Changpeng “CZ” Zhao is awaiting sentencing in April on charges of violating a federal anti-money laundering law, court filings show.

Zhao pleaded guilty in late November to charges of failing to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act, and resigned from his position as CEO of Binance at the same time.

Under the proposed bond, Chow would be required to provide notice to prosecutors and pretrial services at least three days before any travel within the country, to give them time to raise any potential objections.

The new bond terms will also require Chow to surrender his current Canadian passport, and will prevent him from applying for a new passport without court permission. He will also be prohibited from changing his place of residence without prior approval.

Zhao's lawyers objected to the motion, according to the filing. Zhao's lawyer did not immediately respond to CNBC's request for comment.

Judge Richard Jones barred Chow from traveling outside the United States in mid-December, after deciding that Chow's “tremendous wealth” and lack of US ties created a risk of him potentially fleeing if allowed to return to his home in the United Arab Emirates.

The prosecution's most recent filing in U.S. District Court in Seattle noted that pretrial services officers recommended further restricting Chow's movement, allowing him to travel only to the Western District of Washington and the district where he currently resides.

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Pretrial Services also recommended a “site monitoring requirement,” the filing said in a footnote. The filing does not expressly require the judge to impose this condition.

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Chow, a Canadian citizen, is free in the United States on a $175 million personal recognizance bond. His lawyers argued that he took responsibility for his actions, noting that he is paying a $150 million personal fine to the U.S. Commodity Futures Trading Commission as part of his agreement with the government.

The Department of Justice announced Zhao's guilty plea along with Binance's agreement to pay more than $4.3 billion to resolve several federal charges. Attorney General Merrick Garland at the time called it “one of the largest corporate sanctions in the history of the United States.”

Federal sentencing guidelines indicate that Chow could face up to 18 months in prison. Prosecutors They reportedly considered asking for a harsher sentence.

A December 22 letter to the court, which was made redacted in late January, revealed that Chow had requested to return to the UAE for up to four weeks to care for someone in his life who was scheduled to undergo surgery.

The letter showed that Zhao offered to pledge all of his shares in Binance US in order to allay concerns about his potential escape risks. Those shares are worth $4.5 billion as of the company's most recent fundraising round two years ago, Chow's lawyers said in the letter.

Jones declined the travel request on December 29.

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