Cryptocurrency exchange Binance has been ordered by a United States court to pay the Commodities Future and Trading Commission a sum of $2.7 billion, which the exchange agreed to pay as a fine to CFTC following agreeing to charges laid against them.
The CFTC filed a lawsuit against Binance in March of 2023, in which they accused the firm and its CEO on seven counts of trading irregularities and manipulating the cryptocurrency market.
In November of 2023, Binance and its former CEO, Changpeng Zhao, agreed to violate different U.S. securities laws, and the firm agreed to pay $4.3 billion in fines. The CEO at the time, Zhao, was ordered to vacate his position as CEO and leave the company. He was also fined $50 million and ordered to abstain from applying for any significant role in any crypto-related company.
According to the current court ruling made by the U.S. District Court for the Northern District of Illinois, the Binance exchange will pay $2.7 billion to CFTC, and Zhao will also pay $150 million in fines for breaking anti-money laundering laws.
The amount that Binance will pay is divided into two parts: $1.35 billion was fined for ill-gotten transaction fees, and $1.35 billion was turned into penalties that will be paid to the CFTC.
Ever since the removal of C.Z. as Binance’s CEO and the company’s image being tarnished in the public eye, Binance has been actively participating in any of the ongoing legal inquiries from the regulators and has been open to disclosing any relevant information; the regulators seek to ascertain their compliance with the local laws.
The company has also expressed its intentions to fully comply with all the necessary regulations to avoid any such circumstances in the future.
Binance and its former CEO have faced a series of severe charges and legal actions, raising concerns about their compliance with U.S. regulations in the past.
In March 2023, Senator Elizabeth Warren questioned Binance’s financial practices, leading to intense scrutiny by the U.S. Congress. The Commodity Future Trading Commission (CFTC) filed a lawsuit citing seven trading irregularities and market manipulation counts.
Subsequently, in June 2023, the Securities and Exchange Commission (SEC) filed 13 charges, including misusing funds and allowing the sale of unregistered securities. Binance attempted to dismiss both the SEC and CFTC lawsuits in September 2023.
The U.S. Department of Justice indicted Binance and its CEO on November 21, 2023, for violating the Bank Secrecy Act and disregarding anti-money laundering measures while ignoring international sanctions.
Additional charges involve providing customer data to a Russian intelligence agency, facilitating money laundering, serving Iranian customers against U.S. sanctions, permitting individuals from sanctioned jurisdictions to use its platform, and processing Iranian transactions despite sanctions.
Binance also faced accusations of non-compliance with AML laws, withholding information from authorities, and fraudulent management activities in Brazil.
