CZ challenges US gov’t attempt to restrict travel before sentencing

November 25, 2023 Coin Telegraph

Former Binance CEO Changpeng "CZ" Zhao has contested the U.S. Department of Justice's assertions that he is a flight risk and may not return before his sentencing next year.

Former Binance CEO Changpeng "CZ" Zhao has opposed the United States government's efforts to block his return to the United Arab Emirates (UAE) to be with his family while awaiting sentencing following his guilty plea.

In a court filing on November 23, Zhao’s lawyers urged the judge to reject the proposed alteration of his bail conditions, as put forth by the U.S. Department of Justice (DoJ). It was further reiterated that Zhao should be granted permission to leave the U.S. and return to the UAE until his sentencing in February 2024.

The lawyers firmly stated that he has no intention of staying in UAE to evade his sentencing date, despite the potential 18-month prison term.

“As Judge Tsuchida found, all the facts and circumstances amply demonstrate that Mr. Zhao poses no risk of flight and should be permitted to reside at home with his family in the UAE pending sentencing. The government’s motion should be denied.”

*Extract of court filing in the US District Court for the Western District of Washington. Source: CourtListener*

Furthermore, Zhao's lawyers argued that he has taken responsibility for his actions by flying over from the UAE to the U.S.

"His intent is to resolve this case and it would be illogical to take all of these material steps without the intent to appear for sentencing," the filing noted.

On November 22, U.S. prosecutors submitted a court filing, contending that Zhao should be restricted from leaving the United States due to the perceived flight risk.

The DoJ assert that if he chooses not to return for sentencing from the UAE, ensuring his return would pose challenges for the government.

This comes after Zhao agreed to step down as CEO of Binance amid pleading guilty to several charges levied by the Department of Justice (DoJ).

While the deal allows him to maintain his majority stake in Binance, he will not be allowed to hold an executive position at the crypto exchange.

The deal does not affect the pending litigation that Binance has against the US Securities and Exchange Commission (SEC), however will resolve the company’s issues with the Commodities Futures Trading Commission (CFTC).

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Paxos ‘categorically disagrees’ with the SEC that BUSD is a security

February 14, 2023 Coin Telegraph

Binance

Paxos said it will engage with the US securities regulator on the matter and is prepared to "vigorously litigate if necessary."

Paxos Trust Company has released a statement noting that it "categorically disagrees" with the United States securities regulator which has painted Binance USD (BUSD) as a security.

In the Feb. 13 statement, the BUSD issuer confirmed recent reports that it had received a Wells notice from the United States Securities and Exchange Commission (SEC) over BUSD and its alleged failure to register the offering under federal securities laws.

END/ Paxos remains dedicated to the development of stablecoins, tokenization & #blockchain technology. We’ll continue serving the world’s most respected and established companies to create a more open financial system.
— Paxos (@PaxosGlobal) February 13, 2023

"Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws," Paxos said.

The firm noted it had received the notice on Feb. 3, adding that "there are unequivocally no other allegations against Paxos."

"We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary," it added.

On Feb. 13, New York Department of Financial Services (NYDFS) ordered Paxos to halt the issuance of BUSD.

Following the order, Paxos announced in a Feb. 13 Twitter post it will halt minting new BUSD tokens effective Feb. 21.

3/ Paxos will continue to manage all outstanding BUSD reserves, ensuring all BUSD are always backed 1:1 with US dollar-denominated reserves held in bankruptcy remote accounts.
— Paxos (@PaxosGlobal) February 13, 2023

However, Paxos has said BUSD will remain fully supported and redeemable to onboarded customers through at least February 2024.

"New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust," Paxos said.

New York State's Department of Financial Services, or NYDFS, reportedly received a complaint from stablecoin issuer Circle regarding Binance's reserves prior to its crackdown on BUSD.

Binance CEO Changpeng "CZ" Zhao says the exchange will continue to support BUSD despite issuer Paxos being ordered to stop minting the stablecoin by the U.S. SEC and New York regulators.