In a watershed moment, the Commodity Futures Trading Commission (CFTC) has concluded its enforcement action against Binance, the world’s largest centralized crypto exchange, and its founder Changpeng Zhao (CZ). The U.S. court has approved a historic settlement, resulting in fines totaling $2.7 billion. This marks a significant chapter in the ongoing legal saga, shedding light on the regulatory challenges faced by major players in the Binance-centric crypto industry.
Binance: CFTC Secures $2.7 Billion Settlement in Enforcement Action
The Commodity Futures Trading Commission (CFTC) has officially brought an end to its enforcement action against Binance and its founder Changpeng Zhao (CZ). The U.S. District Court for the Northern District of Illinois has approved an order mandating substantial fines for both entities – $150 million for CZ and a staggering $2.7 billion for Binance.
Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.
Binance is no longer a baby. It is…
— CZ 🔶 BNB (@cz_binance) November 21, 2023
This formalized court order follows the settlement agreement announced on Nov. 21, which not only imposed significant financial penalties but also compelled Binance and CZ to enhance their compliance controls. The court order permanently enjoins them from further violations and requires certifications confirming the implementation of improved compliance measures.
In a parallel development, Samuel Lim, Binance’s former chief compliance officer, faces a $1.5 million civil monetary penalty for aiding and abetting Binance’s violations and engaging in activities to evade U.S. law outside the country.
This culmination of the legal battle initiated by the CFTC on March 27 highlights the increased regulatory scrutiny faced by major crypto players, particularly within the Binance ecosystem. As part of the settlement agreement reached with the U.S. Department of Justice (DOJ) and the Treasury Department, Zhao pleaded guilty to civil and criminal charges related to Anti-Money Laundering laws.
District Judge Richard Jones recently sided with the DOJ, preventing Zhao from returning to his residence in the United Arab Emirates before his sentencing in February 2024. The judge emphasized the unique circumstances of the case, citing Zhao’s substantial wealth abroad, lack of ties to the United States, and favored status in the UAE.
This settlement not only signifies a crucial moment in the regulatory landscape of the Binance-centric crypto industry but also underscores the increased accountability faced by major industry players within the Binance ecosystem.