US Court Orders Binance to Pay $2.7 Billion in Settlement with CFTC

Binance Settlement with CFTC

US court has approved a settlement against cryptocurrency exchange Binance and its former CEO, Changpeng "CZ" Zhao, requiring Binance to pay $2.7 billion and CZ to pay $150 million to the Commodity Futures Trading Commission (CFTC).

The court found violations of the Commodity Exchange Act and CFTC regulations, imposing penalties and directing Binance to disgorge ill-gotten transaction fees.

This resolution concludes a long-standing case, with CZ stepping down as part of the settlement with the US Department of Justice, the Treasury Department, and the CFTC.

Binance's former chief compliance officer, Samuel Lim, also faces a $1.5 million penalty.

In a statement on 18 December, the CFTC confirmed the court's approval of the settlement, concluding an enforcement action initiated by the CFTC in November.

The CFTC wrote in a statement:

"The court finds Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty personally against Zhao, and requires Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC,"

The court deemed both parties in violation of the Commodity Exchange Act and CFTC regulations.

CZ's Departure and Legal Proceedings

On 21 November, CZ agreed to step down as Binance's CEO, part of a broader settlement with US regulatory bodies.

Simultaneously, Zhao pleaded guilty to civil charges and a criminal charge related to Anti-Money Laundering laws.

CZ, facing potential prison time, was ordered to remain in the US until his 23 February 2024 sentencing date.

As part of the settlement, CZ and Binance committed to strengthening Know Your Customer measures on the exchange.

Additionally, Binance is required to establish a formalised corporate governance structure, including independent board members, a compliance committee, and an audit committee.

The court separately ordered Binance's former chief compliance officer, Samuel Lim, to pay a $1.5 million civil monetary penalty.

This penalty is attributed to aiding and abetting Binance's violations and engaging in activities to evade US law.

Binance Leadership Transition

Following CZ's departure, Richard Teng assumed the role of CEO.

In an interview on 5 December, Teng assured stakeholders that Binance had undergone substantial changes, focusing on compliance and pledging to meet global regulatory expectations.

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive. https://coinbold.io/us-court-orders-binance-to-pay-2-7-billion-in-settlement-with-cftc/

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