A US judge has banned Changpeng ‘CZ’ Zhao from leaving the country.

A federal judge in Seattle decided Thursday that Changpeng Zhao, the founder of the cryptocurrency exchange Binance, should remain in the United States for months before being sentenced on criminal charges related to anti-money laundering violations.

U.S. District Judge Richard Jones granted federal prosecutors' request for travel restrictions, allowing Zhao to return to his home in the United Arab Emirates, where he previously received a different sentence, ahead of his February sentencing.

Jones overturned that decision, saying Zhao's “huge assets” were overseas and that the lack of an extradition treaty between the US and the United Arab Emirates posed a major risk to the flight.

“The court agrees with the government that this is an unusual case,” Jones wrote in the decision. The accused has a lot of wealth and assets abroad and has nothing to do with America.

Zhao, the Chinese-Canadian entrepreneur who built Binance into the world's largest cryptocurrency exchange, pleaded guilty last month to failing to have an effective anti-money laundering program. He faces 10 to 18 months in prison under federal sentencing guidelines.

Prosecutors argued that the 45-year-old billionaire should remain in the United States because he could easily flee, forfeiting his $175 million bond and forfeiting an additional $5 million bond. He pointed out that due to his citizenship and residency status, the United Arab Emirates government may prevent attempts to extradite Zhao from the United States.

Zhao's lawyers played down such concerns, saying their clients were willing to surrender and admit wrongdoing. The government, on the other hand, assured the billionaire that he would be fine.

“Bail conditions allow the defendant to travel freely within the United States, and his family may visit him in the United States,” Jones wrote.

While Jones sided with the government's position, he made it clear in his decision that the decision was not based on “the alienation or nationality of the defendant.”

Zhao helped launch Binance in Shanghai in 2017 and later moved the company's operations to Malta and the Cayman Islands. US authorities have investigated the exchange for allegedly facilitating illegal transactions.

Last year, Binance agreed to pay millions in fines and damages for “willfully failing” to prevent money laundering and other illegal activities, although no individuals were charged until prosecutors indicted Zhao this November.

U.S. District Judge Richard A. Jones' decision extends an earlier ruling that allowed Zhao to return to his family in the United Arab Emirates. Federal prosecutors have warned that the Chinese-Canadian entrepreneur may be on the run due to the lack of an extradition agreement with the United Arab Emirates.

A Justice Department spokesman told Reuters last week that Zhao could be returned to the United Arab Emirates to await his fate after Monday night. But those plans changed after prosecutors alleged the 45-year-old posed a flight risk despite posting a $175 million bond and pleading not guilty.

“The court agrees with the government that this is an extraordinary case,” Jones wrote in Thursday's ruling, citing Zao's “substantial wealth and assets abroad” to impose travel restrictions.

The ongoing legal drama stems from federal investigations that show Binance, the world's largest crypto exchange founded in 2017, facilitated illegal transactions.

Zhao resigned as CEO last month after the company reached a $4.3 billion settlement related to sanctions and money transfer violations. Individually, he faces up to 10 years in prison and a $50 million fine in his plea agreement with the Justice Department.

Defense lawyers had previously argued that Zhao was responsible for flying to the US to stand trial. He said that it is not necessary to uproot the family just for a quick verdict.

But federal prosecutors convinced Jones that it meant Zhao would avoid further legal punishment, even if they lost a significant bond. It is unclear if or when Jones may be scheduled for a bond hearing.

For now, the beleaguered Zhao remains confined to American soil until his fate is resolved — the latest shift in an industry rocked by crypto's uncertain legal status.

Editor's note: This story was prepared by Decrypt AI from sources cited in the article, and Fact confirmed By Ryan Ozawa.