The U.S. Commodity Futures Trading Commission (CFTC) announced on the 18th that the U.S. District Court has approved the settlement agreement reached between Binance and the CFTC. Zhao Changpeng will pay a fine of $150 million to the CFTC, one-third of which must be paid within the next 30 days. Binance will also pay $2.7 billion in illegal profits and fines to the CFTC.
On the 21st of last month, Binance reached a settlement agreement with the U.S. Department of Justice, the CFTC, and other institutions, admitting guilt and agreeing to pay a fine of $4.3 billion. Binance’s founder, Zhao Changpeng, admitted to violating U.S. anti-money laundering laws and resigned as CEO of Binance.
The CFTC issued a press release on the 18th, announcing that U.S. District Court Judge Manish Shah of the Northern District of Illinois has approved the settlement agreement between Binance and the CFTC. Zhao Changpeng will pay a fine of $150 million to the CFTC, one-third of which must be paid within the next 30 days. Binance will also pay $27 billion to the CFTC.
The CFTC stated that under Zhao Changpeng’s instruction, Binance solicited U.S. customers, including quantitative trading companies, who directly conducted digital asset derivative commodity transactions on the platform. Binance also allowed at least two major brokers to open sub-accounts not bound by Binance’s KYC procedures, allowing U.S. customers to trade directly on the platform, in violation of Binance’s own terms of use.
The CFTC criticized that Binance “chose to ignore these regulations” despite being aware of U.S. regulatory requirements. The judge ordered Zhao Changpeng and Binance to improve compliance controls and permanently prohibit further violations. Binance must establish a corporate governance structure, including a board of directors, compliance committee, and audit committee with independent members.
The judge also issued a separate order requiring Binance’s former Head of Compliance, Samuel Lim, to pay a civil penalty of $1.5 million for assisting and abetting Binance’s violations and engaging in activities to intentionally evade or attempt to evade U.S. law outside the United States.
It is worth noting that although Binance has reached a settlement agreement with institutions such as the CFTC, the U.S. Securities and Exchange Commission (SEC) is not included among the regulatory agencies that have settled with Binance. The SEC stated earlier this month that it plans to continue its lawsuit against Binance and stated that the settlement agreement reached between Binance and U.S. authorities supports the SEC’s continued litigation against the exchange.
However, on the 12th, Binance submitted a response to the court, stating that the settlement agreement reached with the U.S. Department of Justice and other institutions has no substantive relevance to the SEC’s allegations against Binance. Binance argued that the SEC has not provided new and valid evidence for the lawsuit and requested the court to disregard the SEC’s notice, emphasizing that it does not undermine any arguments Binance has made to dismiss the SEC’s lawsuit.
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