Binance and Zhao Hit with $2.7 Billion Fine in CFTC Money Laundering Case

In a CFTC money laundering case, Binance and its former CEO, ChangPeng Zhao, were fined $2.7 billion. The court’s decision also introduces a new CEO, Richard Teng, and raises the prospect of Zhao facing prison time.

The settlement between the CFTC and Binance was approved by the United States District Court for the Northern District of Illinois.

Binance was ordered to pay $2.7 billion in fines, with Zhao personally liable for a $150 million penalty. The charges stem from a Commodity Futures Trading Commission (CFTC) money laundering case.

The court ordered Binance to “disgorge $1.35 billion of ill-gotten transaction fees” and pay the CFTC an additional $1.35 billion in fines. Zhao, who resigned as CEO as a result of the settlement, faces up to ten years in prison.

Binance and Zhao were charged in March 2023 with “willful evasion of federal law and operating an illegal digital asset derivatives exchange.”

Both parties pleaded guilty to violating anti-money laundering rules last month, agreeing to a $4.3 billion settlement.

As part of the agreement, Richard Teng, former Global Head of Binance’s Regional Markets, will become the company’s new CEO.

The court also fined Binance’s former chief compliance officer, Samuel Lim, $1.5 million in civil monetary penalties for his alleged role in aiding and abetting Binance’s violations.

Despite Zhao’s plans to visit his family in the UAE, the court barred him from leaving the country, citing a potential “flight risk.”

The court filing includes defense statements claiming that Zhao faces only a “brief” sentence and has no reason to flee.

The case highlights ongoing legal challenges in the crypto industry as well as the importance of adhering to regulatory standards.