Binance, Changpeng ‘CZ’ Zhao to Pay $2.85B Fine in CFTC Settlement

Binance CEO Changpeng Zhao wearing black hoodie with binance logo. Background of us dollars below a gavel.

Crypto exchange Binance and its founder, Changpeng “CZ” Zhao, will pay nearly $3 billion in fines to the U.S. Commodity Futures Trading Commission to settle the regulator’s lawsuit against it. This builds on separate settlements with the U.S. Department of Justice and Treasury Department in parallel actions also announced Tuesday.

The CFTC sued Binance earlier this year, alleging that the exchange offered unregistered crypto derivatives products in the U.S. despite knowing that was against the law. The suit highlighted the “maze of corporate entities” Binance had, which an official said demonstrated the exchange’s “willful evasion of U.S. law.”

In a press conference Tuesday, CFTC Chair Rostin Behnam said the exchange’s actions “undermined the foundation of safe and sound financial markets” while collecting $1.35 billion in trading fees.

“As evidenced by the internal chats of Binance’s CCO and others, Binance recognized that its platform was used to facilitate criminal activity, including terrorist financing, but chose to turn a blind eye, all in the name of profits,” Behnam said. “Binance and its leaders sought to dupe and indoctrinate their employees and customers, building a cult-like following premised on circumventing their own compliance controls to maximize corporate profits above all else.”

Samuel Lim, the former chief compliance officer, will pay $1.5 million as well if a federal judge signs off on the proposed settlements. He is also banned from acting as an unregistered futures commission merchant or operating any illegal crypto derivatives platforms, the regulator said.

“The resolution of the action against Binance and Zhao – within just 8 months of its filing – solidifies the CFTC’s reputation as the proven leader in the civil enforcement space when it comes to digital assets. We are stalwart in ensuring CFTC registrants comply with our statute and regulations, which serve to protect broader financial health and that directly impacts millions of American investors,” Behnam said.