The court has determined that Zhao and Binance violated the CEA and CFTC rules.
Ex-Chief Compliance Officer Samuel Lim must pay a civil monetary penalty of $1.5 million.
Binance and Changpeng Zhao (CZ), the ex-CEO of the crypto exchange, have been ordered by a U.S court to pay $2.7 billion and $150 million, respectively, to the U.S Commodity Futures Trading Commission (CFTC).
The settlement has been approved by the court, according to the CFTC. After reviewing their actions, the court has determined that Zhao and Binance violated the CEA and CFTC rules. In addition, the lawsuit claims that Binance, which was headed by Zhao, violated its own terms of service by aggressively courting U.S. clients, including quantitative trading companies, to engage in digital asset derivative transactions.
Compliance to Conditions
The court also determined that prime brokers were able to create “sub-accounts” with Binance that were exempt from the KYC processes. It was on purpose that Zhao and Binance hid the fact that their platform had users from the United States.
Moreover, the CFTC has levied a $1.35 billion fine on Binance in connection with these allegations. Also, $1.35 billion in fraudulent transaction fees must be disgorged by Binance. Also, a civil monetary penalty of $150 million will be paid directly by Changpeng Zhao.
Furthermore, for his role in helping Binance commit crimes and for participating in offshore operations to avoid U.S. law, former Chief Compliance Officer Samuel Lim must pay a civil monetary penalty of $1.5 million, according to a separate decision by Judge Manish S. Shah.
Binance and Changpeng Zhao (CZ) have certified their response to the lawsuit and the steps they will take moving forward, per the court’s decision. In response to the CFTC’s complaint, Binance has begun the process of de-affiliating from certain quantitative trading businesses.