CEX

Binance and CZ Settle with CFTC Over Crypto Derivatives Violations

Binance and its former CEO Changpeng Zhao (CZ) have reached a settlement with the U.S. Commodity Futures Trading Commission (CFTC) over allegations that they violated federal laws by allowing U.S. customers to trade crypto derivatives on their platform without registering with the regulator.

CZ

According to the terms of the deal, Binance and CZ will pay a civil monetary penalty in tens of millions and agree to cease and desist from further violations. They will also cooperate with the CFTC in any future investigations and provide periodic reports on their compliance measures.

The CFTC had filed a complaint against Binance and CZ in March 2023, accusing them of soliciting U.S. users for millions in revenue and subverting their own ineffective compliance program. The regulator claimed that Binance and CZ used various techniques to evade detection, such as obscuring their location, coaching VIP customers on how to avoid compliance controls, and using third-party services to process U.S. transactions.

The settlement marks a major blow to Binance, the world’s largest cryptocurrency exchange by trading volume, and its charismatic leader CZ, who has been one of the most influential figures in the crypto industry. Binance has faced increasing regulatory scrutiny and pressure from authorities around the world, including China, Japan, the U.K., Germany, and Canada.

Binance said in a statement that it is pleased to resolve the matter with the CFTC and that it is committed to complying with all applicable laws and regulations in the markets where it operates. CZ said that he respects the CFTC’s role in protecting investors and fostering innovation and that he looks forward to working with the regulator to promote the growth and adoption of crypto.