© Reuters
Following a series of legal challenges, Binance, one of the world’s largest cryptocurrency exchanges, has agreed to a $4.3 billion settlement with multiple U.S. regulatory bodies for violations of sanction and money transmission laws. This settlement includes a personal fine for former CEO Changpeng “CZ” Zhao, who also announced his resignation.
The legal proceedings began on Tuesday in Seattle, where Binance acknowledged willful violations of the Bank Secrecy Act (BSA) and unlicensed money transmission activities. As part of the Department of Justice (DOJ) resolution, Binance consented to payments exceeding $4.3 billion, with Zhao agreeing to step down following his guilty plea and payment of a $50 million fine.
The settlement has had immediate repercussions on the cryptocurrency market. experienced one of its most significant liquidation events this year, with $67 million cleared out as traders failed to meet margin requirements during the sell-off. and traders faced losses of $27 million and $10 million respectively, while (BNB) saw a milder impact with $6 million in liquidations. The majority of these liquidations occurred on Binance itself, where trader positions worth $100 million were wiped out; another platform, OKX, also suffered substantial losses amounting to $62 million.
The joint effort by the DOJ, Commodity Futures Trading Commission (CFTC), Treasury Department, and Financial Crimes Enforcement Network (LON:) (FinCEN) resulted in various penalties for Binance and its executives. The CFTC action demanded disgorgement of ill-gotten gains worth $1.35 billion plus an equal amount in civil penalties. Zhao was credited from his DOJ fine but is required to pay an additional $100 million to the CFTC. FinCEN mandated Binance to exit the U.S. market and imposed a monitorship for five years, with OFAC adding fines totaling nearly one billion dollars.
In response to these developments, Richard Teng has been appointed as the new CEO of Binance. The company is expected to undergo significant changes in its compliance programs as part of the settlement terms.
The Treasury will maintain oversight over Binance for the next five years, with potential additional penalties reaching up to $150 million for any infractions. The crypto community is now looking ahead to Zhao’s sentencing scheduled for February 23rd of next year, which will conclude this chapter in cryptocurrency regulation history.
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