Binance and its former CEO, Changpeng Zhao (CZ), have been ordered by the U.S. District Court for the Northern District of Illinois to pay a total fine of $2.85 billion.
Key Takeaways
- Binance is ordered to pay a total of $2.7 billion, with $1.35 billion designated for disgorging ill-gotten transaction fees and an equal amount as a fine to the CFTC. CZ faces an additional personal fine of $150 million for money laundering.
- The court’s decision stems from a CFTC lawsuit filed in March 2023, accusing Binance and Changpeng Zhao of willful evasion of federal law and operating an illegal digital asset derivatives exchange.
- Both Binance and CZ pleaded guilty to breaching anti-money laundering rules, resulting in a $4.3 billion settlement in November. Zhao stepped down as CEO, with Richard Teng assuming the role.
- Changpeng Zhao faces a potential prison sentence of up to 10 years, and despite intentions to return to the UAE, legal restrictions have been imposed due to concerns of flight risk.
Binance and CZ to Pay $2.7 Billion Fine
In a recent development, the U.S. District Court for the Northern District of Illinois has mandated Binance to pay fine of $2.7 billion. This decision follows a lawsuit brought forth by the Commodity Futures Trading Commission (CFTC), alleging willful evasion of federal law and the operation of an illegal digital asset derivatives exchange.
The court’s order includes a directive for Binance to disgorge $1.35 billion in ill-gotten transaction fees and, additionally, to submit a fine of $1.35 billion to the CFTC. The settlement also involves the former CEO, Changpeng Zhao (CZ), who is individually fined $150 million for money laundering, a charge to which he had pleaded guilty in the preceding $4.3 billion settlement in November.
Background and Legal Ramifications
This legal saga began in March 2023 when regulators accused Binance and Changpeng Zhao of willful evasion of federal law and operating an illegal digital asset derivatives exchange. The recent guilty plea by both entities resulted in the $4.3 billion settlement, prompting Zhao’s resignation as CEO. Richard Teng has since taken over as the new CEO.
Binance to Pay $2.7B in Fine to CFTC; CZ Will Pay $150M#Crypto $BTC $LTC $XRP $ETH $UNI $ADA $BCH $LINK $XLM $FIL $EOS $AAVE $ATOM $MKR $XTZ $ETC $ALGO $DASH $BNB $SOL $VET $THETA $TRX $SUI $LUNA $NEO $CAKE $REV $XEM $TEL $CRO $SHIB $RUNE #Binance #AVAX $LDO $PEPE $TON pic.twitter.com/c0WA58Bp6i
— Dcryptolist Community (@dcryptolist) December 19, 2023
Changpeng Zhao now faces potential legal consequences, including a prison sentence of up to 10 years. Despite expressing an intention to return to the UAE, legal constraints prevent Zhao from doing so due to concerns of being a “flight risk.”
To Conclude
The U.S. court’s decision for Binance and Changpeng Zhao to pay a combined fine of $2.85 billion in the CFTC settlement marks a significant chapter in the ongoing legal challenges faced by the cryptocurrency exchange.
The financial penalties and potential legal consequences for Zhao underscore the gravity of the allegations and highlight the broader regulatory scrutiny within the cryptocurrency industry.
