Binance To Pay $2.7 Billion Fine To CFTC For Evading Federal Law

Binance will pay $2.7 billion to the Commodity Futures Trading Commission (CFTC) for evading federal law and operating an illegal derivatives exchange. Meanwhile, the cryptocurrency exchange's founder, Changpeng "CZ" Zhao, will pay $150 million. "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," wrote the CFTC in a statement. CoinTelegraph reports: The approved settlement marks the conclusion of a long-running case against CZ and Binance by the CFTC. On Nov. 21, CZ agreed to step down from his role at the helm of Binance as part of a wider settlement with the U.S. Department of Justice, the Treasury Department and the CFTC. On the same day, Zhao pleaded guilty to several civil charges and one criminal charge relating to Anti-Money Laundering laws. On Dec. 7, CZ was ordered to remain in the U.S. until his Feb. 23, 2024 sentencing date. He faces up to 18 months in prison on money laundering charges and has agreed not to appeal any potential sentence up to that length. As part of the settlement, both CZ and Binance have agreed to take further steps to ensure Know Your Customer measures are maintained on the exchange as well as requiring Binance to implement a formalized corporate governance structure, including a board of directors with independent members, a compliance committee and an audit committee. The court also made a separate order for Binance's former chief compliance officer, Samuel Lim, to pay a $1.5 million civil monetary penalty for "aiding and abetting Binance's violations and engaging in activities outside of the U. S. to willfully evade or attempt to evade U.S. law."

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