A U.S. court has issued an order against cryptocurrency exchange Binance and its former CEO Changpeng Zhao, approving Binance to pay $2.7 billion to the Commodity Futures Trading Commission (CFTC) to achieve a settlement, while Changpeng Zhao (nicknamed CZ) personally needs to pay $150 million.
The CFTC announced in a statement on December 18 that the U.S. District Court for the Northern District of Illinois had approved the previously announced settlement plan and ended the enforcement action first issued by the CFTC in November.
"The court found that Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposed a civil penalty of US$150 million on Zhao personally, and required Binance to return US$1.35 billion in improper transaction fees and pay a fine of US$1.35 billion," the CFTC wrote in a statement.
The approved settlement marks the end of the CFTC’s long-running lawsuit against CZ and Binance. The agency indicted the executive and his exchange on March 27, accusing him of evading federal law and operating an illegal derivatives exchange.
On November 21, CZ agreed to resign as the helm of Binance as part of a broader settlement with the U.S. Department of Justice, Treasury and the U.S. Commodity Futures Trading Commission (CFTC). On the same day, Zhao pleaded guilty to multiple civil charges and one criminal charge related to anti-money laundering laws.
As part of the settlement, both CZ and Binance agreed to take further steps to ensure the exchange maintains “know your customer” measures and required Binance to implement a formal corporate governance structure, including a board of directors composed of independent members, a compliance committee, and an audit committee.
The court also separately ordered Binance’s former chief compliance officer Samuel Lim to pay a $1.5 million civil penalty for “aiding and abetting Binance’s illegal conduct and engaging in activities outside the United States that knowingly evaded or attempted to evade the laws of the United States.”
CZ’s CEO position was taken over by Richard Teng, Binance’s former global regional market director.
In an interview with Cointelegraph on December 5, Teng described Binance as “completely different” and assured investors that the days of “compliance gaps” are now gone. Teng said that going forward, Binance is investing heavily in ensuring compliance with the requirements of global regulators.
Over the past 18 months, Binance has been forced to terminate or significantly adjust its core services in multiple jurisdictions around the world, including the Netherlands, Cyprus, Australia, and Canada.
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