US Court Orders Binance to Pay $2.7 Billion to CFTC

• A U.S. court has approved substantial penalties against Binance and its former CEO, Changpeng Zhao, in response to a money laundering case brought by the U.S. Commodity Futures Trading Commission (CFTC).
• The court imposed a $150 million civil monetary penalty on Zhao, and Binance is required to disgorge $1.35 billion in ill-gotten transaction fees, along with a $1.35 billion penalty to the CFTC, as part of the settlement
• The settlement includes a consent order for permanent injunction, civil monetary penalty, and equitable relief against Zhao and Binance.

A month after global cryptocurrency platform Binance entered a guilty plea and paid billions of dollars in fines, a United States court has issued another ruling against Binance and its former chief executive officer, Changpeng Zhao, approving substantial penalties for money laundering in response to a case brought by the U.S. Commodity Futures Trading Commission (CFTC).

(Read more articles about the Binance situation in the Philippines.)

Binance vs. CFTC

According to the court’s filing, it imposed a $150 million civil monetary penalty on Zhao, and Binance is required to discharge $1.35 billion in ill-gotten transaction fees, along with a $1.35 billion penalty to the CFTC.

The settlement, which was reached in late November, has now been formally approved by the U.S. District Court for the Northern District of Illinois, which entered a consent order for permanent injunction, civil monetary penalty, and equitable relief against Zhao and Binance.

Last month, Zhao and Binance acknowledged guilt and consented to pay a $4.3 billion penalty to the US Securities and Exchange Commission (US SEC) for violating the Bank Secrecy Act, which included allegations of insufficient anti-money laundering controls enabling criminal use of the platform. 

Zhao Case

After Binance pleaded guilty, Zhao stepped down from his position and was replaced by Binance Singapore CEO Richard Teng.

Following this, a federal judge has ordered him to stay in the U.S. temporarily preventing his return to the United Arab Emirates until the court reviews the government’s motion. 

Zhao, released on a $175 million bond, faces a sentencing hearing on Feb. 23 for criminal charges tied to Binance. Prosecutors sought to bar his exit before sentencing, citing flight risk, while his lawyers argued for travel permission.

Binance Situation in PH

Recently, in a panel discussion, SEC Commissioner Kelvin Lee clarified the impending ban on Binance and other unregulated exchanges. He revealed that the ban, initially set for three months from the advisory’s issuance on November 29, might be extended based on feedback. 

Lee disclosed that the original recommendation was for a shorter ban, possibly even as brief as one week. He emphasized the aim of the extended timeline, avoiding disruptions during the Christmas season for Filipino investors.

Moreover, Binance issued a warning prompt to Filipino users trying to engage in its ‘Swap to Win’ airdrop, citing regulatory compliance concerns. 

Preceding these events, the Philippine SEC issued a warning regarding Binance’s unauthorized operations, underscoring the importance of adhering to local regulations. The Commission also sought cooperation with the National Telecommunications Commission (NTC) to block unregistered crypto exchanges in the country. Initially, Binance declared a pause in its marketing activities in the Philippines but subsequently reversed the decision, affirming its dedication to regulatory alignment.

Kenneth Stern, the General Manager of Binance Philippines, departed the company last month, as indicated by his LinkedIn profile’s most recent employment change.

Read: Overview of Binance PH Operations

This article is published on BitPinas: US Court Orders Binance to Pay $2.7 Billion to CFTC

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