Changpeng Zhao, the Founder and former CEO of Binance, must stay in the United States until his sentencing is scheduled in February, a US federal judge ruled on Thursday. This decision overruled Zhao's previous bail agreement that would have allowed him to visit his UAE residency but requires him to return to the US two weeks before his sentencing.

The ruling came only a day after the court accepted Zhao's guilty plea for violating one count of Bank Secrecy Act violation.

Bail Agreement Does not Guarantee Free Movement

Zhao entered the guilty plea last month and consecutively signed a $175 million bond agreement. He already put up about $15 million in an escrow account and found guarantors for the additional funds.

Although the initial bail agreement permitted him to leave the United States temporarily, the federal protestors raised concerns to the court about Zhao's potential as a flight risk. They pointed out that the US does not have an extradition treaty in place with the UAE, and if Zhao decided not to return for the sentencing, they could not force him to return. Also, most of his assets are outside the US jurisdiction, so it would be challenging to recover the bail proceeds.

"The defendant has articulated justifications that in most cases would cause the government's motion to be denied," the judge wrote in the latest ruling. "However, a critical feature of the government's motion is the extent of the defendant's enormous wealth and absence of an extradition treaty with the UAE."

"In addition, the defendant's family resides in the UAE, and there is no indication he has any other ties to the United States. While the defendant has indicated he will be asking for a lesser sentence, the government has indicated it may be asking for as much as 18 months of incarceration. Consequently, the defendant is not facing an insignificant sentence."

Breaking News: CZ Must Stay in the U.S. Until His Sentencing

US District Judge Richard Jones just ruled that Binance founder Changpeng Zhao (CZ) can’t return to his home in the United Arab Emirates (UAE) before he is sentenced in the US, which will not be for at least six… pic.twitter.com/5kD5psAZTn

— John Reed Stark (@JohnReedStark) December 8, 2023

Sentencing Is Pending for February

The judge further highlighted that although Zhao could go behind bars for a maximum period of 18 months, he might only face a prison time of 10 months. The sentencing for anti-money laundering violations can be up to 20 years without a plea agreement.

Zhao founded Binance in 2017 and led the exchange until recently, making it the largest crypto exchange globally in terms of trading volume. Binance also settled with the US federal prosecutors, paying $4.3 billion, and shelled out an extra $2.85 billion to settle the charges brought by the US commodities regulator. It is still battling with the Securities and Exchange Commission.