Agreed to pay $2.7 billion to CFTC
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The CFTC will receive $150 million from CZ Zhao and $2.7 billion from Binance, following an order imposed on the cryptocurrency exchange by a U.S. court.
The approved settlement ends the CFTC’s lengthy legal action against CZ and Binance.
The Commodity Futures Trading Commission (CFTC) will receive $150 million from Binance’s former CEO CZ Zhao and $2.7 billion from Binance, following an order imposed by a U.S. court on the cryptocurrency exchange.
The Northern District of Illinois approved the previously announced settlement. This marks the end of the enforcement action the CFTC first announced in November, the CFTC said in a statement Dec. 18. The CFTC noted:
“The court found that Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposed a civil penalty of $150 million on Zhao personally, and recovered $1.35 billion in trading fees improperly obtained by Binance. and demanded that it pay a fine of $1.35 billion. CFTC”
The approved settlement ends the CFTC’s lengthy legal action against CZ and Binance. On March 27, the agency filed a lawsuit against the executive and his exchange, accusing him of operating an unauthorized derivatives exchange and evading federal law.
CZ agreed to resign as CEO of Binance on November 21 as part of a larger settlement with the CFTC, the Treasury Department, and the U.S. Department of Justice. Zhao pleaded guilty the same day to several civil and criminal offenses related to anti-money laundering laws.
CZ was ordered Dec. 7 to remain in the United States until his sentencing date of Feb. 23, 2024. Charged with money laundering, he could face up to 18 months in prison. He agreed to waive his right to appeal at that point.
In exchange for resolving the dispute, Binance agreed to establish a formal corporate governance structure that would include an audit committee, compliance committee, and board of directors comprised of independent members. CZ has also committed to taking additional steps to ensure that its Know Your Customer policy is maintained on the Exchange.
Binance’s former Chief Compliance Officer, Samuel Lim, was also ordered by a court to pay a $1.5 million civil penalty for intentionally operating outside the United States with the intent to evade or escape U.S. law. Order received. For aiding and abetting Binance’s crimes.
Binance has been forced to suspend or significantly change its basic services in several international jurisdictions over the past 18 months, including the Netherlands, Cyprus, Australia, and Canada.
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