Judge Approves Settlement: Binance to Pay $1.5 Billion to CFTC, CZ to Pay $150 Million Fine
In a significant legal development, Judge Manish Shah of the U.S. District Court for the Northern District of Illinois has issued a verdict ordering cryptocurrency exchange Binance and its former CEO, Changpeng “CZ” Zhao, to pay a staggering $2.85 billion to the Commodity Futures Trading Commission (CFTC).
The CFTC, in its press release dated December 18, announced that the court had given its approval to the previously disclosed settlement. The consent order for permanent injunction, civil monetary penalty, and equitable relief was entered against Changpeng Zhao and Binance.
Moreover, the court order imposes additional obligations on Zhao and Binance, requiring them to provide certifications regarding the existence, application, and efficacy of Binance’s enhanced compliance controls. The court also enjoined Binance to offboard any account failing to meet compliance standards after applying all KYC policies.
Furthermore, the court order mandates that Binance implement a corporate governance structure, including a Board of Directors with independent members, a Compliance Committee, and an Audit Committee.
According to the CFTC’s statement, this order marks the conclusion of an enforcement action initiated by the CFTC in November, as the court’s findings state that both Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, resulting in a substantial financial penalty. Changpeng Zhao has been personally slapped with a $150 million civil monetary penalty. In comparison, Binance is mandated to disgorge $1.35 billion of ill-gotten transaction fees and pay an additional $1.35 billion as a penalty to the CFTC.
In a related development, former Chief Compliance Officer Samuel Lim is required to pay a $1.5
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