The Commodity Futures Trading Commission (CFTC) states that the court deciding the case against Binance and its founder Changpeng “CZ” Zhao has formalized the settlement of a $150 million civil monetary penalty personally against Zhao, and Binance to disgorge $1.35 billion of “ill-gotten” transaction fees and pay a $1.35 billion penalty to the CFTC.
The Order also requires Zhao and Binance to improve compliance and demands no future violations.
A separate order requires Binance’s former Chief Compliance Officer Samuel Lim to pay a $1.5 million civil monetary penalty for aiding Binance’s violations and engaging in activities outside of the US “to willfully evade or attempt to evade US law.”
The case revolves around Binance enabling users to evade KYC/AML requirements. Also, some US-based customers accessed the Binance platform, evading national restrictions.
Binance and Zhao have certified that Binance has offboarded the quantitative trading firms identified in the CFTC’s complaint as they do not meet Binance’s improved onboarding criteria.
Binance and Zhao also certified that any customer must complete all KYC onboarding procedures.
After applying all KYC policies and procedures to all existing sub-accounts, Binance will offboard every account that fails to meet its compliance controls.
The case is being heard in the U.S. District Court for the Northern District of Illinois under Judge Manish S. Shah.
The announcement made by the CFTC is part of a broader case filed by the Securities and Exchange Commission and the US Department of Justice. The settlement is the largest of its kind ever.