A United States court has ordered cryptocurrency exchange Binance and its former CEO, Changpeng “CZ” Zhao, to pay substantial fines totaling $2.85 billion.
This resolution comes as part of a settlement with the Commodity Futures Trading Commission (CFTC), marking the end of a high-profile enforcement action against the exchange and its top executive.
Breakdown of the Court’s Order
The U.S. District Court for the Northern District of Illinois approved the settlement, requiring Binance to disgorge $1.35 billion in ill-gotten fees and pay an additional $1.35 billion in penalties.
Changpeng Zhao, widely known as CZ, is personally liable for a civil monetary penalty of $150 million. The CFTC’s statement detailed the violations of the Commodity Exchange Act (CEA) and CFTC regulations by Zhao and Binance.
The case traces back to a CFTC lawsuit filed in March, accusing CZ and Binance of evading U.S. laws and operating an unlicensed derivatives exchange. As part of a broader settlement, CZ stepped down from his role at Binance in November, pleading guilty to various charges, including one criminal charge related to Anti-Money Laundering laws.
Following the settlement, both CZ and Binance have agreed to implement more robust compliance measures. These include stricter Know Your Customer protocols and establishing a formal governance structure with independent board members and dedicated committees. The court has also ordered Binance’s former chief compliance officer, Samuel Lim, to pay a $1.5 million penalty.
It is an honour and with the deepest humility that I step into the role of Binance’s new CEO.
We operate the world's largest cryptocurrency exchange by volume. The trust placed on us by our 150m users and thousands of employees is a responsibility that I take seriously and hold…
— Richard Teng (@_RichardTeng) November 21, 2023
Post-settlement, Richard Teng, former global head of regional markets at Binance, has assumed the role of CEO. He has committed to enhancing regulatory compliance and ensuring the crypto exchange operates within legal boundaries worldwide.
