Binance and Changpeng Zhao to pay $2,85 billion to CFTC as part of settlement agreement
The company was also required to implement a standardized corporate structure with a board of directors and audit and compliance committees
19.12.2023 - 08:39
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3 min
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What’s new? As part of the settlement of claims by the US Commodity Futures Trading Commission (CFTC), crypto exchange Binance and its founder Changpeng Zhao pleaded guilty to violating the Commodity Exchange Act. The court approved the settlement agreement between the parties, which also involves fines of $150 million personally for the businessman and $1,35 billion for the company. In addition, the exchange will return another $1,35 billion in illegal transaction fees.
What else is known? The CFTC filed a civil lawsuit against Binance in March of this year. According to officials, the global exchange allowed derivatives transactions to be conducted by US clients and unnamed trading firms supplying liquidity, whereas they should have been allowed access only to the local arm, Binance.US. To this end, the exchange neglected identification (KYC) procedures and sometimes gave customers instructions on how to bypass them.
В CFTC анонсировали больше принудительных мер в отношении криптобирж
Ранее для урегулирования претензий комиссии основатель Binance заплатил 50 млн долларов штрафа
Under the terms of the settlement agreement, the global exchange will remove US brokerage subaccounts and implement a corporate governance structure including an independent board of directors, a compliance committee, and an audit committee.
The exchange had earlier said its new CEO Richard Teng and co-founder Yi He would have a standardized corporate structure, including a headquarters.
In a separate order, the court ordered former Binance compliance officer Samuel Lim to pay a $1,5 million civil penalty for aiding and abetting the exchange’s violations and engaging in activities outside the United States to willfully evade US law.
Binance and Zhao also settled DOJ claims of money laundering and sanctions violations. In this case, the businessman’s sentence will be announced in early 2024, and he is prohibited from leaving the country due to flight risk.
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