The order comes less than a month after Changpeng Zhao stepped down as CEO of Binance after failing to implement adequate anti-money laundering measures on the platform.
The US District Court for the Northern District of Illinois has ordered Binance and its former CEO, Changpeng Zhao (CZ), to pay $2.7 billion in fines, a December 18 ruling outlines. This amount includes a fine for money laundering and represents a pivotal moment in addressing Binance’s continued regulatory challenges.
According to the settlement, Zhao is personally responsible for paying $150 million, while Binance must pay $2.7 billion.
$1.35 billion of this fine will be disgorged transaction fees, and $1.35 billion will be paid as a penalty to the Commodity Futures Trading Commission (CFTC).
The court found that Binance and Zhao violated the Commodity Exchange Act (CEA). Specific violations include the solicitation of US customers for crypto derivatives transactions, alongside allowing trading without proper know your customer (KYC) procedures.
The CTFC said that Zhao was “aware” of regulatory requirements, but “chose to ignore them” and willingly concealed the presence of US customers on its international platform.
“In violation of its own Terms of Use, Binance also allowed at least two prime brokers to open “sub-accounts” that were not subject to Binance’s know your customer (KYC) procedures and enabled U.S. customers to directly trade on the platform,” the Commission wrote.
It added: “The order also finds Zhao and other members of Binance’s senior management actively facilitated violations of U.S. law, including instructing U.S. customers to evade compliance controls.”
Related: Binance roadblocked in UK after FCA adds partner to ‘Warning List’
The order comes less than a month after CZ stepped down as CEO of Binance after pleading guilty to various charges, including failure to implement anti-money laundering measures on Binance’s platform.
In the settlement with the DOJ and CFTC, Binance was ordered to pay more than $4 billion, and CZ was personally liable to pay $150 million.
CZ was succeeded as CEO by Richard Teng, the company’s former Head of Regional Markets, who has a strong background in financial regulation.
Read more: Who is Richard Teng, Binance’s new CEO?
Teng said that his focus as CEO will be on “collaborating with regulators to uphold high standards”, as well as driving the growth of Web3 adoption.
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