The largest cryptocurrency exchange, Binance, is ordered to pay a mammoth fine of $2.7 billion to the U.S. Commodity Futures Trading Commission (CFTC) for violations of U.S. regulations.
According to the official release from the CFTC, the U.S. District Court of the Northern District of Illinois has approved a settlement order in which Binance will pay a fine of $2.7 billion and its former CEO Changpang Zhao (CZ) will pay $150 million for “permanent injunction, civil monetary penalty, and equitable relief.”
The penalty has been fined over the charges of Zhao and Binance violating the Commodity Exchange Act and CFTC regulations by allowing U.S. customers to trade directly on the Binance platform as well as allowing brokers to open sub-accounts without proper KYC procedures.
The CFTC claims that Binance and Zhao neglected the U.S. regulatory requirements despite being aware of them. The agency also said that the firm actively facilitated violations of U.S. law while instructing users to evade compliance controls.
The court order also requires Binance and Zhao to make additional certifications, “including that Binance will no longer allow existing sub-accounts, including those opened by prime brokers, to bypass the platform’s compliance controls.”
Alongside the Binance settlement order, the judge has also issued a separate order to Binance’s former Chief Compliance Officer, Samuel Lim, to pay a civil monetary penalty of $1.5 million for attempting to evade U.S. laws by abetting Binance’s violations by engaging in activities outside the country.
