US court approves agreement on Binance to pay $2.7B to CFTC
A US court has entered an order against the crypto exchange Binance and its former CEO Changpeng “CZ” Zhao, which requires Binance to pay $2.7 billion and CZ $150 million to the Commodity Futures and Trading Commission (CFTC).
In a statement issued on December 18, the CFTC announced that the US District Court for the Northern District of Illinois had approved the previously announced settlement, ending the enforcement action originally issued by the CFTC in November.
“The court ruled that Zhao and Binance violated the Commodity Markets Act (CEA) and CFTC regulations, ordered Zhao to personally pay a $150 million civil monetary penalty, and ordered Binance to forfeit $1.35 billion in illegally obtained trading fees and pay a $1.35 billion fine to the CFTC. ,” the CFTC wrote in a statement.
Federal court orders injunction against Binance and former CEO Zhao as it ends CFTC enforcement action: https://t.co/YJD1lglbsZ
— CFTC (@CFTC) December 18, 2023
The approved settlement marks the conclusion of the CFTC's long-running case against CZ and Binance. The agency charged the executive and the exchange on March 27 with evading federal law and operating an illegal exchange.
In the year On November 21, CZ agreed to step down from leadership of Binance as part of a broader settlement with the US Department of Justice, Treasury and CFTC. Later that day, Zhao pleaded guilty to several civil charges and one criminal charge related to anti-money laundering laws.
Related: Binance CEO outlines plans for crypto exchange after CZ ousts
As part of the settlement, both CZ and Binance have agreed to take additional steps to ensure that KYC measures are in place on the exchange, and that Binance will implement a formal corporate governance structure, consisting of an independent board of directors, a compliance committee, and an audit committee.
The court separately ordered Binance's former chief compliance officer, Samuel Lim, to pay $1.5 million in fines for “aiding and abetting Binance's violations and intentionally attempting to evade or evade U.S. law through activities outside the United States.”
CZ replaces Binance's former head of international regional markets, Richard Teng, as CEO.
It is an honor and deeply humbled to step into the new role of CEO of Binance.
We operate the world's largest cryptocurrency exchange by voice. The trust placed in us by our 150m users and thousands of employees is a responsibility I take seriously.
— Richard Teng (@_RichardTeng) November 21, 2023
In an interview with Cointelegraph on December 5, Teng stated that Binance is “absolutely different”, assuring investors that the days of “gaps in compliance” are now firmly behind it. Moving forward, Teng Binance has invested heavily in ensuring compliance with regulatory agencies around the world.
Over the past 18 months, Binance has been forced to discontinue or significantly modify its core services in several jurisdictions around the world, including the Netherlands, Cyprus, Australia, and Canada.
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