Federal Court Approves Binance Settlement with CFTC
A federal court has given its approval to a settlement between Binance, the popular cryptocurrency exchange, and the US derivatives markets regulator, the Commodity Futures Trading Commission (CFTC). The court found that Binance and its founder, Changpeng Zhao, violated the rules of the derivatives markets regulator as well as laws governing commodity futures trading in the US.
The settlement, which was announced in November, includes a $150 million civil monetary penalty against Zhao personally and requires Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC. As part of the agreement, Zhao resigned as CEO of Binance.
According to the CFTC, Binance was accused of operating as an unregistered futures commission merchant (FCM), running an illegal digital asset derivatives exchange, and lacking adequate know-your-customer compliance controls.
Criminal Charges and Potential Prison Time
Zhao is currently facing criminal charges related to these violations. Last week, Rostin Behnam, Chair of the CFTC, stated that Zhao could potentially face prison time. The sentencing process is expected to take some time.
Hot Take: Binance Faces Significant Penalties
Binance’s settlement with the CFTC highlights the importance of regulatory compliance in the cryptocurrency industry. Violations can result in substantial penalties and even criminal charges for individuals involved. This case serves as a warning to other crypto exchanges and market participants that regulatory authorities are actively monitoring their activities and will take action against those who fail to comply with the law.
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