A U.S. Court Approves Settlement in Binance Case
A settlement has been approved by the U.S. District Court for Northern Illinois in the case involving Binance, the largest crypto exchange. This settlement resolves an enforcement action initiated by the CFTC in November.
Fines Imposed on Former CEO and Binance
The settlement requires former CEO Changpeng Zhao and Binance to pay fines of $150 million and $2.7 billion, respectively. These penalties are part of the agreement reached with the Commodity Futures Trading Commission (CFTC).
“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.”
Court statement
Resolution of Regulatory Conflict
This approved settlement agreement brings an end to the conflict between the regulatory body and the trading platform. The CFTC had charged Binance and Zhao in March 2023 for operating an illegal derivatives exchange and evading federal law.
Zhao’s Resignation and Guilty Plea
As part of a broader settlement with the U.S. Department of Justice, Treasury Department, and CFTC, Zhao agreed to step down as Binance’s CEO on November 21. On the same day, he pleaded guilty to civil charges related to anti-money laundering laws. He also faces up to 18 months in prison for a money laundering charge.
Hot Take: Binance Faces Significant Penalties in Settlement with CFTC
A U.S. court has approved a settlement between Binance and the Commodity Futures Trading Commission (CFTC), resulting in substantial fines for both the former CEO Changpeng Zhao and the crypto exchange. This resolution marks the end of a regulatory conflict that accused Binance of operating an illegal derivatives exchange and violating federal law. The court’s decision imposes a $150 million civil penalty on Zhao personally, while Binance is required to disgorge $1.35 billion in ill-gotten transaction fees and pay an additional $1.35 billion penalty to the CFTC. This outcome underscores the increasing scrutiny faced by crypto exchanges from regulatory authorities.
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