Binance, a cryptocurrency exchange, and the U.S. Commodity Futures Trading Commission (CFTC) have resolved in the legal case initiated in March at the Northern District Court of Illinois. This approval marks the conclusion of the enforcement action initiated by the CFTC in November.
Federal Court Enters Order Against Binance and Former CEO, Zhao, Concluding CFTC Enforcement Action: https://t.co/YJD1lglbsZ— CFTC (@CFTC) December 18, 2023
“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,” wrote the CFTC in a statement. Concurrently, the former CEO of the exchange, Changpeng Zhao (CZ), is subject to an individual penalty of $150 million, with one-third of this amount due within the next 30 days.
Additionally, Samuel Lim, Binance’s former Compliance Director, is facing a civil penalty of $1.5 million for aiding and abetting Binance in violating and evading U.S. laws.
In the official announcement on December 18, the court clarified that, under the guidance of Changpeng Zhao, Binance knowingly attracted U.S. customers while disregarding established regulations.
Furthermore, regulatory authorities have mandated Binance and Zhao to institute a formalized corporate governance structure. This includes the formation of a board of directors with independent members, a compliance committee, and an audit committee.
CZ was succeeded as CEO by Binance’s former global head of regional markets, Richard Teng.
It is an honour and with the deepest humility that I step into the role of Binance’s new CEO.— Richard Teng (@_RichardTeng) November 21, 2023
We operate the world's largest cryptocurrency exchange by volume. The trust placed on us by our 150m users and thousands of employees is a responsibility that I take seriously and hold…
Teng conveyed that Binance had undergone substantial changes, emphasizing that the era of regulatory compliance lapses was definitively in the past. Teng assured investors that Binance was committed to robust compliance measures with regulatory agencies worldwide.
In the preceding 18 months, Binance encountered the necessity to either discontinue or make significant modifications to its primary services in various global jurisdictions, such as the Netherlands, Cyprus, Australia, and Canada.
Previously, on March 27, the CFTC filed a lawsuit against Binance and CEO Changpeng Zhao, accusing them of violating regulations in derivatives trading. Allegations included Binance processing transactions for entities on the U.S. terrorism watchlist and continuing to provide services to users from prohibited platforms.
The agency also accused Binance of operating a separate trading unit comprising 300 accounts, all directly or indirectly under the leadership of Changpeng Zhao. After almost nine months of legal challenges, numerous disputes, and denials, the final resolution has now been reached.