The US District Court announced the resolution of the dispute between the CFTC and Binance. According to the settlement agreement, the crypto exchange will be required to pay a fine of $2.7 billion. Former Binance CEO Changpeng Zhao was sentenced to a fine of $150 million.
A US District Court has approved a settlement agreement between the Binance crypto exchange and the US Commodity Futures Trading Commission (CFTC).
The statement announced the settlement of the dispute and the conclusion of the CFTC case against Binance. As a reminder, on March 27, 2023, the CFTC filed a lawsuit against Binance and its CEO Changpeng Zhao (CZ) for violating US law.
According to the document , the crypto exchange was actively attracting clients in the United States, including firms engaged in trading. Such companies are reported to have transacted digital assets directly on the Binance platform.
According to the court, the crypto exchange allowed at least two clients to open “sub-accounts” that were not subject to Know Your Customer (KYC) procedures and allowed US clients to trade directly on the platform.
The order also states that Zhao and Binance were aware of US regulations but chose to ignore them and deliberately concealed the presence of US clients on the trading platform. The investigation found that Zhao and other members of Binance's senior management actively facilitated violations of US law, including instructing US clients to "evade compliance controls."
As part of the settlement with the CFTC, Binance is required to return $1.35 billion in illegal transaction fees, as well as pay a fine of $1.35 billion. In addition, the court fined Changpeng Zhao $150 million.
A separate order imposes penalties of $1.5 million on Binance Chief Compliance Officer Samuel Lim for aiding Binance's violations and engaging in activities outside the United States to willfully evade or attempt to evade taxes.
Let us recall that at the end of November, Binance and its founder Changpeng Zhao were found guilty of violating US laws. The exchange agreed to pay fines totaling $4.3 billion. The CFTC called a “deterrent” for other market participants.
Kaiko analysts believe that Coinbase and Bybit benefited the most from Binance’s deal with the US authorities. Meanwhile, the CFTC said it intends to continue pursuing crypto exchanges that violate federal law.
