A United States court has formalized a settlement between digital asset exchange Binance and the Commodity Futures Trading Commission (CFTC), nearly a month after former CEO Changpeng ‘CZ’ Zhao pleaded guilty to charges related to anti-money laundering violations. This marks the end of a case that has reverberated throughout the cryptoverse.
Settlement Between Binance And CFTC Approved
A federal judge has approved the previously announced multi-billion-dollar settlement between Binance and the CFTC.
According to a Dec.18 press release from the CFTC, the U.S. District Court for the Northern District of Illinois approved the settlement, which requires Binance to pay a $1.35 billion fine to the CFTC, as well as disgorge a further $1.35 billion in “ill-gotten transaction fees”. Zhao will have to pay $150 million, with a third of that to be handed over in the next 30 days.
CFTZ stated that Binance, under CZ’s direction, “actively solicited” U.S.-based customers and helped them dodge compliance controls by concealing their presence on the trading platform.
As part of the settlement, both CZ and Binance have agreed to take additional steps to ensure Know Your Customer procedures are followed on the exchange, as well as requiring the world’s largest crypto exchange by trading volumes to put in place a formal corporate governance structure that includes a board of directors with independent members, a compliance committee and an audit committee.
Binance’s settlement with the CFTC marks the conclusion of a months-long case against CZ and Binance. Zhao and his exchange were taken to court by the CFTC earlier this year for knowingly evading U.S. federal law and operating an unregistered derivatives exchange.
On Nov.21, Zhao pleaded guilty to Anti-Money Laundering violations. CZ also agreed to resign from his role as the head of Binance as part of a broader settlement with the U.S. Department of Justice, the Treasury Department, and the CFTC. Nonetheless, the exchange still has a pending lawsuit with the U.S. Securities and Exchange Commission, which charged Binance, Binance.US, and CZ for securities law violations back in June.
Zhao is currently residing in the U.S. as he awaits his sentencing ruling in February 2024 after District Judge Richard Jones ordered him to remain in the country as he was a flight risk. The crypto billionaire faces an 18-month jail sentence.
