U.S. court approves settlement payment to end CFTC’s lawsuit against the crypto giant.

The United States District Court for the Northern District of Illinois has instructed the cryptocurrency exchange Binance to pay 2.7 billion dollars to the U.S. Commodity Futures Trading Commission (CFTC) in order to conclude an ongoing lawsuit against the firm.

The former CEO of Binance, Changpeng “CZ” Zhao, was slapped with a 150-million-dollar penalty to have the CFTC enforcement proceedings dropped.

The settlement resolves the lawsuit initiated by the CFTC in November. Zhao and Binance were charged with evading federal law and operating an illegal derivatives exchange.

In a statement issued on 18 December, the CFTC stated, “The court finds Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty personally against Zhao, and requires Binance to disgorge 1.35 billion dollars of ill-gotten transaction fees and pay a 1.35-billion-dollar penalty to the CFTC.” 

On 21 November, CZ agreed to step down from his role at Binance as part of a broader settlement with the U.S.

Department of Justice, the Treasury Department, and the CFTC. On the same day, he pleaded guilty to civil and criminal charges related to Anti-Money Laundering laws.

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Zhao shall stay in the U.S. until his sentencing date on 23 February 2024, facing a potential 18-month prison term on money laundering charges.

As part of the settlement, Binance committed itself to reinforcing Know Your Customer measures on the exchange, and to establish a formalized corporate governance structure, incorporating a board of directors with independent members, a compliance committee, and an audit committee.

CZ has been succeeded as CEO by Richard Teng, Binance’s former global head of regional markets.

During the past 18 months, Binance has faced regulatory challenges and has withdrawn from or restricted its services in various jurisdictions, including the Netherlands, Cyprus, Australia, the United Kingdom, the U.S., Germany, Italy, Russia, and Canada.