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A U.S. court has issued an order against the cryptocurrency exchange Binance and its former CEO, Changpeng “CZ” Zhao, mandating that Binance pay $2.7 billion and CZ pay $150 million to the Commodity Futures Trading Commission (CFTC).
In a statement released on Dec. 18, the CFTC revealed that the U.S. District Court for the Northern District of Illinois had sanctioned the previously disclosed settlement and concluded the enforcement action initially initiated by the CFTC in November.
“The court determines that Zhao and Binance breached the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty on Zhao personally, and mandates Binance to return $1.35 billion in illicit transaction fees and pay a $1.35 billion penalty to the CFTC,” the CFTC stated.
The ratified settlement signifies the end of a protracted case against CZ and Binance by the CFTC. The agency filed a lawsuit against the executive and his exchange on March 27 for circumventing federal law and running an unlawful derivatives exchange.
On Nov. 21, CZ consented to resign from his position as CEO of Binance as part of a broader settlement with the U.S. Department of Justice, the Treasury Department, and the CFTC. On that same day, Zhao admitted guilt to multiple civil charges and one criminal charge related to Anti-Money Laundering regulations.
Related: Binance CEO outlines plan for crypto exchange after CZ steps down
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Under the terms of the settlement, both CZ and Binance have committed to implementing additional measures to uphold Know Your Customer protocols on the exchange, as well as requiring Binance to establish a formal corporate governance framework, which includes a board of directors with independent members, a compliance committee, and an audit committee.
The court also issued a separate order for Binance’s former chief compliance officer, Samuel Lim, to pay a $1.5 million civil monetary penalty for “aiding and abetting Binance’s violations and engaging in activities outside of the U.S. to willfully evade or attempt to evade U.S. law.”
CZ has been succeeded as CEO by Binance’s former global head of regional markets, Richard Teng.
In a conversation with Cointelegraph on Dec. 5, Teng characterized Binance as being “totally different,” assuring investors that the era of having “gaps in compliance” was now firmly in the past. Teng stated that moving forward, Binance is significantly focused on ensuring adherence to regulatory bodies worldwide.
In the last 18 months, Binance has been compelled to discontinue or substantially modify its core services in various jurisdictions globally, including the Netherlands, Cyprus, Australia, and Canada.
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