Binance, the world’s largest cryptocurrency exchange by trading volume and its founder Changpeng Zhao founded under a pseudonym are at last seeing their judgment on Facebook pages finalized. According to CFTC, the court has ordered a consent order of permanent injunction with monetary fines and equitable relief against both Zhao and Binance.
Financial Consequences For Binance and its Founder
At trial, Zhao and Binance were found to have violated the Commodity Exchange Act (CEA) as well as CFTC regulations. Zhao led Binance to face due punishment for illegally transacting in digital asset derivatives with U.S.-based customers and violating its own user agreements.
Binance was also found guilty of allowing prime brokers to use various tricks, such as setting up sub-accounts around KYC (Know Your Customer) checks. The group had even actively wiped away the footprints left by American users on their platform trying not get noticed and be shut down like other exchanges.
As a result, Binance is now required to pay the CFTC $1.35 billion in fines and refund an equal amount of exorbitant trading fees. Furthermore, Zhao must pay a personal fine of US $ 150 million.
Separately, Judge Manish S. Shah fined Binance’s former Compliance Director Samuel Lim as well. Lim is also required to pay a $ 1.5 million fine for assisting the exchange in illegally doing business and taking part itself in US illegal activities.
Future Compliance and Operational Requirements
Under U.S., regulations, Binance and Zhao must get certificates stating that the enhanced compliance controls have been implemented and are effective. If the center can’t get these certificates, or has any further infractions it could result in a permanent operational ban of its U.S. operations.
Disclaimer: This article is for reference. It does not take sides in investment decisions. The cryptocurrency market is very risky and volatile, so investors must do their homework.