Binance is paying one of the largest fines in corporate history to the U.S. Department of Justice, while its founder and CEO, Changpeng “CZ” Zhao, stepped down from his role running the platform as part of a settlement with multiple federal agencies. Meanwhile, Kraken is facing a lawsuit from the U.S. Securities and Exchange Commission that echoes the SEC’s previous wave of suits.
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The narrative
Binance settled charges with multiple U.S. agencies (with one major exception), ending one of the most highly anticipated regulatory actions in crypto.
Why it matters
Binance is the world’s largest crypto exchange by volume, and just agreed to pay what federal officials are describing as some of the nation’s largest fines.
Breaking it down
Binance and Changpeng “CZ” Zhao settled with multiple federal agencies on Tuesday, agreeing to pay billions of dollars in a deal that will also see Zhao face potential prison time, Binance make a “complete exit” from the U.S. and agree to strict oversight from monitors over the next several years.
If you missed Tuesday’s regulatory extravaganza:
- Binance and the Department of Justice settled charges that Binance conspired to conduct an unlicensed money transmitting business where it failed to have an anti-money laundering program. Binance will pay a $1.8 billion fine and $2.5 billion in forfeitures, as well as appoint a monitor for three years to ensure its compliance with federal law moving forward.
- Zhao and the Department of Justice settled charges that the now-former exchange CEO violated the Bank Secrecy Act and tried to have a financial institution violate the Bank Secrecy Act. Zhao agreed to pay $50 million but his sentencing isn’t for another few months.
- Binance and the Commodity Futures Trading Commission settled the Commodity Futures Trading Commission’s (CFTC) March 2023 suit alleging it operated an unlicensed crypto derivatives trading platform in the U.S. and went out of its way to hide it from U.S. regulators. Binance will pay $1.35 billion in civil penalties and another $1.35 billion in disgorgement.
- Zhao and the CFTC settled, in which Zhao will pay $150 million to the agency.
- Former Binance Chief…
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