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A federal judge has approved an agreement between Binance, former CEO Changpeng Zhao, and the CFTC over their massive payments
Binance, hit with a $4.3 billion penalty, will pay around half now, while Zhao faces a $150 million penalty staggered into thirds
This resolution follows Zhao’s guilty plea to charges related to anti-money laundering violations.
A federal judge recently approved a settlement between cryptocurrency exchange Binance, former CEO Changpeng Zhao, and the Commodity Futures Trading Commission (CFTC) in the wake of last month’s bumper settlement. This resolution comes approximately a month after Zhao pleaded guilty to charges related to anti-money laundering violations, leaving him facing a $150 million penalty and Binance facing a $4.3 billion payout. The payments have been staggered, with Binance paying half its penalty now and Zhao having his split into thirds.
Staggered Payments Allow Binance to Continue
Zhao and Binance’s negotiated settlement was publicized at the end of last month, with many believing that both would have to pay in one go. According to the terms of the settlement, however, Zhao is required to pay one-third of his $150 million within the next 30 days, while Binance is obligated to pay $1.35 billion to the CFTC, along with disgorging $1.35 billion in ill-gotten transaction fees, which should be passed back to US users.
The CFTC released a statement on Monday in which it asserted that Binance, under the direction of its Zhao, actively encouraged customers in the United States to use the platform while being fully aware of US regulations that prohibited this practice.
Zhao to Stay in US Ahead of Sentencing
As part of the consent order, Binance is compelled to establish a robust corporate governance structure, including the implementation of a board of directors with independent members, a compliance committee, and an audit committee.
Binance’s huge fine was based on violations of the Bank Secrecy Act, the International Emergency Economic Powers Act, and the failure to register as a money transmitting business. As well as being forced to step down from his role, Zhao faces up to 18 months in prison and has been told he must remain in the US until his sentencing in February.
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