U.S. Court Ruling Against Binance and CEO CZ
A U.S. court has issued a ruling against Binance, the cryptocurrency exchange, and its former CEO Changpeng “CZ” Zhao. Binance is ordered to pay $2.7 billion, and CZ is to pay $150 million to the Commodity Futures Trading Commission (CFTC).
The CFTC announced on December 18 that the U.S. District Court for the Northern District of Illinois had approved the previously disclosed settlement, concluding the enforcement action initiated by the CFTC in November.
“The court finds Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty personally against Zhao, and requires Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC,” stated the CFTC.
You can read the press release here.
The approval of the settlement marks the conclusion of a lengthy legal battle involving CZ and Binance pursued by the CFTC. The agency filed a lawsuit against the executive and the exchange on March 27, alleging evasion of federal law and the operation of an illicit derivatives exchange.
By November 21, CZ had agreed to step down from his position at Binance as part of a broader settlement involving the U.S. Department of Justice, the Treasury Department, and the CFTC. Simultaneously, Zhao admitted to multiple civil charges and a criminal offence related to Anti-Money Laundering laws.
Impact of Binance’s Legal Issues on Cryptocurrency Markets
According to the settlement terms, both CZ and Binance committed to strengthening Know Your Customer protocols on the platform. Additionally, Binance is required to establish a structured corporate governance model, incorporating an independent board of directors, compliance committee, and audit committee.
Separately, the court issued an order for Binance’s former chief compliance officer, Samuel Lim, to pay a $1.5 million civil penalty for aiding Binance’s violations and engaging in activities outside the U.S. to evade or attempt to evade U.S. law.
Richard Teng, Binance’s former global head of regional markets, succeeded CZ as CEO.
Despite this entire legal battle, Bitcoin has seen a 160% increase year-to-date, showing little impact.
