Binance's $4.5 Billion Stock Guarantee Used for Bail! CZ's Request to Return to UAE to Visit Family Denied by Judge for the Third Time
CNBC reported that Binance founder Changpeng Zhao, also known as CZ, had used his Binance equity, valued at $4.5 billion, as collateral in late December to request permission from a judge to return to the UAE to visit important family members undergoing surgery. However, the judge subsequently denied the request citing "significant flight risk."
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CZ Pledges $4.5 Billion Binance Equity as Guarantee
According to a criminal court document released on Wednesday, CZ and his legal team wrote to the presiding judge, Richard Jones, on December 22 last year, requesting CZ to return to Abu Dhabi, UAE on January 4 this year to visit and participate in the hospitalization, surgery, and recovery process of an important family member or friend, expected to last 1 to 4 weeks.
The document also mentioned that CZ proposed to use his Binance equity as collateral:
In consideration of the Court's potential concerns with this request, Mr. Zhao is willing to provide additional financial security to ensure his return, including all of Mr. Zhao's equity in Binance. Based on the company's last financing round 2 years ago, the equity is valued at $4.5 billion.
It further added, "Once the Court allows, CZ will go to the US District Court WDWA to submit the itinerary and all relevant pre-trip information. He will also report back to WDWA officials immediately upon his return to the US."
Judge Denies CZ's Request:
The presiding judge, Richard Jones, held a closed-door hearing on December 29 regarding the request and denied CZ's plea:
The Court further orders that Mr. Zhao shall remain in the United States during the pendency of his defense and trial and shall be free to move about within the United States.
Additionally, Jones cited a statement from December 7, noting that CZ's substantial wealth in the UAE posed a serious flight risk:
The defendant has substantial wealth and property abroad and no ties to the United States, and he and his family appear to have a special status in the UAE where they reside.
Emphasizing, "Under these circumstances, the Court finds that the defendant has not demonstrated by clear and convincing evidence that his return to the UAE this time will not result in flight."
US Court denies Zhao Changpeng's return to the UAE, CZ awaits sentencing in the US
CZ's Road to Return to the UAE Filled with Twists and Turns
Previously reported, former Binance CEO CZ pleaded guilty in lawsuits with the Commodity Futures Trading Commission (CFTC) and the US Treasury Department, agreeing to pay a $4.3 billion fine and resign from his position, which is currently held by former Regional Market Global Head Richard Teng.
Throughout the investigation and trial process, the Court and the US Department of Justice deliberated multiple times on CZ's ability to return to the UAE, ultimately resulting in a denial.
Reasons for the denial included CZ's uncontrollable assets, his freedom to move about in the US, and the ability for his family to visit him in the US.
Binance founder Zhao Changpeng banned from leaving the country for the second time, awaits sentencing hearing in February
It is reported that CZ's sentencing hearing is scheduled for February 23, 2024, and if he fails to appear, he faces a maximum of 10 years in prison and a $250,000 fine.