A Federal Judge Approves Settlement Between Binance and CFTC
A settlement between cryptocurrency exchange Binance and the Commodity Futures Trading Commission (CFTC) has been approved by a federal judge. This comes after the exchange’s former CEO, Changpeng Zhao, pleaded guilty to charges related to anti-money laundering violations. As part of the settlement, Zhao will have to pay $150 million, with a third of that amount due within the next 30 days. Binance itself will be required to pay a $1.35 billion penalty to the CFTC and disgorge $1.35 billion of “ill-gotten transaction fees.”
Binance Ignored US Regulations
The CFTC stated that Binance, under Zhao’s direction, solicited customers in the United States and was aware of US regulations but chose to ignore them. The consent order also mandates that Binance and Zhao establish a corporate governance structure, including a board of directors with independent members, a compliance committee, and an audit committee.
Criminal Case and Record-Setting Corporate Settlement
In late November, multiple federal agencies announced a record-setting corporate settlement of $4.3 billion. Zhao pleaded guilty to anti-money laundering and sanctions violations after years-long probes by federal regulators. He has also stepped down as chairman of the board of directors for Binance.US.
Hot Take: Binance Faces Consequences for Anti-Money Laundering Violations
Crypto exchange Binance has been hit with significant penalties and fines as a result of its former CEO’s guilty plea to charges related to anti-money laundering violations. The settlement with the CFTC includes a payment of $1.35 billion by Binance and $150 million by Changpeng Zhao himself. This case highlights the importance of compliance with regulations in the cryptocurrency industry, particularly when operating in the United States. Binance will now need to implement a corporate governance structure to ensure better adherence to regulations and oversight. The significant penalties imposed on Binance and Zhao send a strong message about the consequences of ignoring anti-money laundering laws.
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