The Great Settlement! U.S. Court Approves CFTC's Settlement Agreement with Binance and Its CEO
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The Great Settlement! U.S. Court Approves CFTC's Settlement Agreement with Binance and Its CEO
The court also noted that a permanent injunction must be issued to prevent further violations.
Navigating Web3 tides with focused insightsSource: BeInCrypto
Compiled by: Blockchain Knight
A U.S. federal district court has approved the settlement agreement between the CFTC (Commodity Futures Trading Commission) and Binance. The court formally signed a consent order imposing a series of fines and injunctions on the crypto exchange and its CEO, Changpeng Zhao (CZ).
According to a recent statement, the court found that CZ and Binance were alleged to have violated the Commodity Exchange Act and CFTC regulations, resulting in a $150 million civil penalty against CZ personally.
Binance is required to disgorge $1.35 billion in illicit transaction fees and pay an additional $1.35 billion penalty to the CFTC.
The court requires CZ and Binance to demonstrate evidence of the effectiveness of enhanced compliance controls. The court also stated that permanent injunctions must be put in place to prevent further violations.
This decision follows the CFTC's initial announcement of the settlement on November 21.
The CFTC claimed that, under Zhao’s direction, Binance allegedly solicited U.S. customers—including quantitative trading firms—in violation of its own terms of use.
The exchange reportedly allowed prime brokers to set up unregulated "sub-accounts," facilitating direct trading for U.S. clients without proper Know Your Customer (KYC) procedures.
The CFTC further claimed that Zhao and Binance were fully aware of U.S. regulatory requirements but “chose to ignore them.”
The CFTC also accused them of actively concealing the presence of U.S. clients on the platform. In addition, senior executives including Zhao were alleged to have facilitated violations of U.S. laws by instructing clients to circumvent compliance controls.
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