Binance and its former CEO, Changpeng Zhao (CZ), have been ordered to pay $2.7 billion to the CFTC.
CZ is expected to personally pay $150 million.
The settlement requires Binance to strengthen its KYC measures and establish formal corporate governance.
A settlement approved by the US court system
A federal judge in the United States has approved a settlement between cryptocurrency exchange Binance and the Commodity Futures Trading Commission (CFTC). This judgment, signed by Judge Manish Shah of the Northern District of Illinois, orders Binance to pay $2.7 billion to the CFTC.
In addition, former CEO of Binance, Changpeng “CZ” Zhao, must pay a civil penalty of $150 million for “violating the Commodity Exchange Act and CFTC regulations.
This settlement follows years of investigations by federal regulators. Recently, Zhao pled guilty to violations of anti-money laundering and sanctions laws. This judgment marks the conclusion of a lengthy case against Binance and CZ, who were accused of violating federal law and operating an illegal derivatives exchange.
New requirements and governance changes
In response to the judgment, Binance and CZ have agreed to implement additional measures to ensure the maintenance of know-your-customer (KYC) procedures on the exchange.
Furthermore, Binance is now required to establish a “formal corporate governance structure”. This structure will include a board of directors with independent members, a compliance committee, and an audit committee.
Samuel Lim, former Chief Compliance Officer of Binance, has also been ordered to pay a civil penalty of $1.5 million for aiding and abetting Binance’s violations and engaging in activities outside the United States to evade or attempt to evade US law.
