On Tuesday, Changpeng Zhao (CZ) admitted guilt and stepped down as CEO. Binance shall settle fines exceeding $4.3 billion, with $50 million contributed by the former CEO. Part of this sum will address allegations raised by the Commodity Futures Trading Commission, related to Binance permitting U.S. customers to engage in trading unregistered cryptocurrency derivatives.
Speaking on the development further, CFTC Commissioner Christy Goldsmith Romero added: “There are no pirate ships in US markets” and that “access to US customers is a privilege, not a right.”
Goldsmith emphasized the CFTC’s commitment to maintaining a robust approach against crypto exchanges that breach trading regulations. He highlighted a zero-tolerance policy for tactics such as VPN usage or any attempts to evade KYC rules, including superficial pop-up queries asking users to confirm they are not located in the U.S.
In a distinct statement, CFTC Commissioner Caroline D. Pham affirmed the CFTC’s global jurisdiction, stating unequivocally that the regulatory body will persist in its efforts against non-U.S. entities.
Learning from FTX’s Episode
Soon after the development, Binance founder Changpeng Zhao stepped down as the CEO with Richard Teng taking over his position. CZ also meets the same fate as that of his rival and disgraced FTX founder Sam Bankman-Fried, and is facing charges of breaching the US anti-money-laundering laws. However, CZ is currently out of custody on a $175 million bond with the final hearing scheduled in February 2024.
The prompt decision follows an extended legal case involving FTX founder SBF, who entered a not-guilty plea to seven felony counts. This also included conspiracy to commit money laundering. SBF is currently held at New York’s Metropolitan Detention Center, anticipating sentencing, with the potential for a maximum prison term of 110 years.
Just a month back, Binance filed for dismissing all accusations by the US CFTC. However, these developments have given the regulator a chance to pursue further action against other exchanges.