A United States court has entered an order against crypto exchange Binance and its former CEO Changpeng “CZ” Zhao, which will see Binance pay $2.7 billion and CZ pay $150 million to the Commodities Futures and Trading Commission (CFTC). 

In a Dec. 18 statement, the CFTC announced that the U.S. District Court for the Northern District of Illinois had approved the previously announced settlement and concluded the enforcement action first issued by the CFTC in November. 

“In formalizing the settlement initially announced on November 21 the court finds Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty personally against Zhao, and requires Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC,” wrote the CFTC in a statement. 

This is a developing story, and further information will be added as it becomes available.

Kristin Johnson of the United States Commodity Futures Trading Commission (CFTC) said there are many ways of handling cryptocurrencies in the country, but legislating through courts could provide a solid, if slow, path.

Speaking at the Blockchain Association’s Policy Summit in Washington, D.C. on Nov. 30, Johnson said the “best outcome” for corporate governance of crypto firms would be to have companies implement their own plans. She cited policymakers introducing reporting requirements for Binance as part of a $4.3 billion settlement with the crypto exchange.

We’re honored to welcome @CFTCjohnson to the #BAPolicySummit stage for our next session as she sits down with @GeorgiaQuinnEsq of @Anchorage pic.twitter.com/FpgQRjPZ0B

— Blockchain Association (@BlockchainAssn) November 30, 2023

According to the CFTC commissioner, Congress could also step in and provide clarification as to the definition of a security — one of the key points behind the U.S. Securities and Exchange Commission (SEC) taking enforcement actions against crypto firms. At times, the CFTC and SEC have had seemingly inconsistent approaches to crypto enforcement depending on which assets the departments considered a security or commodity.

“If we rely on the courts we will get good guidance, but it won’t come quickly,” said Johnson. “We’ve been in these situations before with new financial technology and we should trust in the legal system.”

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Though the CFTC and SEC have both at times settled lawsuits with different crypto firms rather than going to trial, many companies have asked for their day in court. Binance and Coinbase are still facing lawsuits from the SEC filed in June, and the CFTC took legal action against Voyager Digital in October. At the time, Johnson said Voyager was “no better than a house of cards.”

One of five commissioners at the CFTC, Johnson took office in March 2022 after more than a decade working as a law professor. She has often advocated for more robust regulatory controls for crypto and called on Congress to expand the CFTC’s authority over digital assets.

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