Settlement Approved by U.S. District Court
The U.S. District Court for the North District of Illinois has officially approved the settlement between the Commodity Futures Trading Commission (CFTC) and cryptocurrency exchange Binance and former CEO Changpeng Zhao.
Settlement Breakdown
The court issued a consent order encompassing a permanent injunction, civil monetary penalty, and equitable relief against Binance and Zhao. Zhao is obligated to pay a $150 million civil monetary penalty to the CFTC, while Binance will make two payments of $1.35 billion each as a refund and penalty.
Court Findings
The court found that Binance actively solicited U.S. customers to trade digital assets on its platform, including quantitative trading firms. It also uncovered that Binance allowed prime brokers to establish “sub-accounts” exempt from know your customer (KYC) procedures, which violated regulatory standards.
Resolutions and Acknowledgment
Binance announced resolutions with various regulatory entities and its CEO, Zhao, agreed to step down and plead guilty to violating anti-money laundering requirements. The team took responsibility for their past mistakes.
Compliance Measures
Binance is now required to enforce compliance controls and offboard accounts that don’t meet proper KYC requirements. They must also implement a governance structure including a Board of Directors, Compliance Committee, and Audit Committee.
Hot Take: Binance Settles with CFTC for $2.85 Billion
The settlement between Binance and the CFTC has been approved, with former CEO Changpeng Zhao and Binance agreeing to pay a total of $2.85 billion. This settlement comes as a result of Binance’s violations of the Commodity Exchange Act and CFTC regulations. The court found that Binance actively solicited U.S. customers and allowed certain accounts to bypass KYC procedures. Binance has acknowledged their mistakes and announced resolutions with various regulatory entities. Going forward, Binance will be required to enforce compliance measures and implement a governance structure. With this settlement, Binance aims to rectify its past actions and move towards a more compliant future.
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