On December 18, the CFTC announced that it had reached a settlement with Binance and its CEO, Changpeng Zhao. Zhao thus agreed to pay a fine of $150 million, compared to $1.35 billion for the crypto exchange.
Crypto exchange Binance facing several charges
The CFTC accuses Binance of violating the CEA as well as crypto regulations in the United States. Concretely, the largest crypto exchange finds itself facing at least three charges.
In particular, he allegedly offered his services to quantitative trading companies, without registering with the CFTC. The crypto company also allegedly authorized at least two prime brokers to open “sub-accounts” that were not subject to Binance’s know-your-customer (KYC) procedures. Enough to allow American customers to trade directly on the crypto platform.
Still according to the CFTC, the crypto exchange would have ignored certain US regulatory requirements. Despite the fact that Binance was aware of the CFTC’s requirements, it decided to ignore them and knowingly conceal the presence of American customers on the platform.
What about the amicable settlement with the CFTC?
Binance is now prohibited from committing further violations of US crypto laws and regulations.
Decryption: Binance can no longer offer services in the United States without registering with the CFTC.
That’s not all ! The crypto company must also return ill-gotten transaction fees. This represents a total of 2.7 billion dollars.
The order requires Binance to:
- issue certifications regarding the existence, application and effectiveness of Binance’s enhanced compliance controls.
- establish a corporate governance structure.
The latter will include:
- a board of directors composed of independent members;
- a compliance committee;
- an audit committee.
In any case, the agreement between Binance and the CFTC represents an important victory for American regulators. They send a clear message to crypto platforms: they must comply with regulations.
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