Binance to Pay $2.7B, Zhao $150M to CFTC to Settle its Issues, On Top of Other Fines

After the historic and whopping fine presented to Binance in its controversial trial, it is now getting another settlement order from the Commodity Futures Trading Commission (CFTC), compelled to pay as much as $2.7 billion. On the other hand, Binance's former CEO, Changpeng Zhao, is also seeing a fine from the CFTC, which requires paying as much as $150 million.

The massive fines on Binance are stacking atop each other, with the company no longer allowed to use sub-accounts for KYC transactions but allowed to continue its operations.

Binance to Pay $2.7 Billion Fine to CFTC

The CFTC has released a new statement regarding the federal agency's order against Binance, and it will require the cryptocurrency exchange platform to pay a total of $2.7 billion in fines.

The CFTC previously announced that a separate settlement to the agency for both Binance and Zhao would be made, with the crypto company "to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC. The order also obligates Zhao and Binance to make certifications as to the existence, application, and efficacy of Binance's improved compliance controls, and permanently enjoins them from further violations as charged."

This is part of the issue with both entities regarding their avoidance of US regulatory requirements, centering on unauthorized trading in the country via the platform.

CFTC Compels Zhao a $150 Million Fine

On the other hand, Zhao also gets a fine with as much as a $150 million civil monetary penalty, as both parties (together with Binance) violated CFTC's Commodity Exchange Act.

As per the previous plea agreement via Ars, the $50 million fine against Zhao can be credited under certain terms against the amount it needs to pay the CFTC.

Binance and its Controversy Before

Right after FTX's former CEO and founder, Sam Bankman-Fried, was found guilty, the United States Department of Justice (DOJ) began its trial against Binance, including scrutiny by the company and its top executive. The main focus of this centered on fraud and money laundering issues, which the company allowed, with its settlement reaching around $4 billion, the largest in history.

in a short while, a deal has been made with Binance's former CEO, with CZ pleading guilty to the charges and facing criminal charges, also resigning from his post. Changpeng Zhao was also banned from getting involved with Binance for as much as three years after the recent sentencing, with a civil penalty of $50 million to pay the DOJ as part of the plea agreement.

This $50 million fine for CZ is deductible from the CFTC's order against the executive, meaning he still owes $100 million in cash to pay the agency. On the other hand, there is still Binance's $2.7 billion fine to the CFTC that it also needs to pay, with half of it forfeting the ill-gotten wealth of the company and another $1.35 billion as a penalty for their illicit activities.

Nevertheless, Binance will continue operations in the US.