Recently, Binance reached a deal valued at more than $4 billion to have investigations against it dropped by the US Department of Justice (DOJ). An agreement, almost of the same ilk, involving, like the previous one, Changpeng Zhao, the former CEO of Binance, was concluded according to the latest news. This time, with the Commodity Futures Trading Commission (CFTC). The deal has implications.
Agreement with CFTC forces Binance to take action
According to recent reports, there has been a development in the legal case between crypto exchange Binance and the Commodity Futures Trading Commission (CFTC). The two parties thus reached an agreement which imposes heavy sanctions on the exchange, but also on its former leader, Changpeng Zhao.
Thus, Binance will have to pay a fine of $2.7 billion. The latter involving the restitution of $1.35 billion in transaction fees deemed ill-gotten. The remaining $1.35 billion represents a penalty to be paid to the CFTC. As for Changpeng Zhao, he received a civil fine of $150 million.
These sanctions intervene to punish the choices of the ex-CEO, to launch Binance on the derivatives market. This, in defiance of American laws. This development can also be interpreted as additional pressure aimed at Binance’s compliance with compliance rules. From now on, the crypto exchange will have to scrupulously ensure this if it wants to continue to exist.
What consequences for Binance?
The question needs to be asked. Especially when we know the financial situation of Binance which has continued to worsen in recent months. This, with direct consequences on the firm’s market shares, which have also been particularly eroded.
Although still the leader of the exchange market with a little over 50% market share, Binance risks losing its place. A position that competing exchanges such as Coinbase, among others, could recover.
As things currently stand, it cannot be said precisely what paying a fine of $2.7 billion could mean for Binance. A lesser evil, one is tempted to say compared to a long and costly trial, and a slightly more damaged credibility!
However, added to the 4.3 billion dollars recently imposed by the DOJ, we imagine that this cannot but be without consequences for Binance. What is certain is that this development gives a little more weight to the projections seeing the crypto exchange lose its leadership in 2024.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
