CFTC Commissioner says Binance’s $4.3b settlement due to rule-breaking, not fraud

Binance received a “heightened” multi-billion fine following previous public warnings from several regulators, said the CFTC Commissioner.

Kristin Johnson, a Commissioner at the Commodity Futures Trading Commission (CFTC), told a digital assets summit on Dec. 5 that Binance reached a multi-agency settlement because of its rule-breaking. According to Commissioner Johnson, the mammoth crypto exchange was not accused of fraud or similar crimes and simply failed to comply with established laws. 

“For those firms that really do want to successfully operate in this space, there is an increasingly clear template for how to operate. Take the hint.”

Kristin Johnson, CFTC Commissioner

Binance agreed to settlement terms by the CFTC, the U.S. Justice Department, and the Treasury over a lengthy investigation into suspected money laundering, sanctions evasion, and other misconduct.

As part of the deal, Changpeng Zhao stepped down as CEO of Binance and chairman of Binance.US. Richard Teng succeeded Zhao as the new chief of Binance, as the former CEO argued for permission to return to the UAE pending his court sentencing.

Federal prosecutors urged a Judge to remand Zhao to the U.S. because of his significant flight risk and unknown resources.

Meanwhile, crypto participants have shared thoughts regarding Binance and Zhao, with some, like Coinbase CEO Brian Armstrong, opining that the settlement generally signaled positive things for crypto.

John Reed Stark, a former chief of the Securities and Exchange Commission (SEC), said the SEC now has a trove of evidence that could implicate Binance in a separate collection of allegations.

Part of the settlement included installing a government-appointed monitor to oversee Binance and its operations. According to Stark, this monitor will likely have access to all company records, past and present, giving the SEC a more comprehensive outlook of Binance’s dealings.