Binance SETTLES Case With CFTC—Here’s How Much They Had To Pay

December 19, 2023 2:48 pm Comments

Binance has settled with the Commodities and Futures Trading Commission (CFTC) and agreed to pay a hefty fine to the regulator.

The world’s largest centralized exchange agreed to pay the CFTC $2.7 billion in fines among other concessions; this is in addition to the $4 billion in fines Binance has agreed to pay for separate litigation with other U.S. regulators.

Current CEO Richard Teng has assured investors and clients that Binance has enough reserves to pay the $4 billion in initial fines and continue its normal business operations.

Former CEO Changpeng Zhao is also facing legal trouble and separate litigation in the United States; he recently lost his bid to return home to the UAE until the start of his trial. Here’s more on the latest legal troubles the massive centralized exchange is currently facing:

The Block detailed the financial penalty:

Under the settlement, former CEO Changpeng Zhao will have to pay $150 million, with a third of that paid within the next 30 days, according to the order signed on Dec. 14 by Judge Manish Shah in the U.S. District Court for the Northern District of Illinois.

Binance will have to pay a $1.35 billion penalty to the CFTC, as well as disgorge $1.35 billion of “ill-gotten transaction fees,” according to the order.

Crypto Town Hall also clarified how the fine was broken down and revealed that former CEO Changpeng Zhao is not off the hook: “CZ will pay $150 million, and Binance will pay $2.7 billion to the CFTC.”

Crypto Briefing provided an excerpt from the Northern District of Illinois ruling against Binance and Zhao:

“Binance, at Zhao’s direction, actively solicited customers in the United States, including quantitative trading firms, who entered into digital asset derivative transactions directly on the Binance platform.

In violation of its own Terms of Use, Binance also allowed at least two prime brokers to open “sub-accounts” that were not subject to Binance’s know your customer (KYC) procedures and enabled U.S. customers to directly trade on the platform.”

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.