CFTC’s Case Against Binance Comes to an End
On December 18, 2023, the Commodity Futures Trading Commission (CFTC) announced that it has concluded its enforcement action against major crypto exchange Binance. The United States District Court for the Northern District of Illinois entered a previously proposed consent order against Binance and its former CEO, Changpeng Zhao (CZ). As part of the settlement, Binance will pay $2.7 billion in disgorgement and penalty, with $1.3 billion being ill-gotten transaction fees and another $1.3 billion as a civil monetary penalty to the regulator. CZ will personally pay a civil monetary penalty of $150 million.
Binance’s Ongoing Legal Battle With the SEC
In November 2023, CZ stepped down as CEO of Binance and pleaded guilty to breaking anti-money laundering rules. He also resigned from his position as chairman of the board of directors at Binance.com. CZ faces a maximum of 18 months in prison and will remain in the US until his sentencing on February 23, 2024. Meanwhile, Binance reached a $4.3 billion settlement with the US Department of Justice after admitting to violating the Bank Secrecy Act and other regulations.
Binance is still engaged in a legal battle with the Securities and Exchange Commission (SEC) over allegations of securities violations. The exchange has filed a lawsuit to dismiss the SEC’s claims.
Hot Take: Conclusion of CFTC Case Marks Milestone for Binance
The recent conclusion of the CFTC’s enforcement action against Binance represents a significant milestone for the crypto exchange. With the payment of $2.7 billion in disgorgement and penalty and CZ’s personal payment of $150 million, Binance has resolved the charges brought against it by the regulator. This settlement puts an end to the legal battle between Binance and the CFTC, allowing the company to move forward with implementing a corporate governance structure that includes independent board members, a compliance committee, and an audit committee. However, Binance’s legal troubles are not over, as it continues to face allegations of securities violations from the SEC. The outcome of this ongoing battle will shape the future of the exchange and its relationship with US regulators.
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