A United States court has approved a settlement regarding crypto exchange Binance and its former CEO Changpeng “CZ” Zhao. As part of the settlement, which concludes an enforcement action by the Commodity Futures Trading Commission (CFTC), Binance will pay $2.7 billion while CZ will personally pay $150 million.
The court found that Zhao and Binance violated commodity trading laws and CFTC regulations. Specifically, Zhao is being ordered to pay a $150 million penalty, while Binance must forfeit $1.35 billion in ill-gotten transaction fees as well as pay an additional $1.35 billion fine.
Binance’s former chief compliance officer Samuel Lim was also ordered to pay a $1.5 million penalty for assisting with Binance’s violations and evading U.S. law.
The settlement marks the end of a long legal case against CZ and Binance by the CFTC, which had sued them for operating an illegal derivatives exchange. As part of the settlement, CZ has stepped down as CEO and Binance has agreed to reforms relating to know-your-customer rules, corporate governance, and compliance.
Binance has faced regulatory crackdowns around the world over the past 18 months. The exchange’s new CEO Richard Teng has stated that Binance is now fully committed to compliance going forward.
