U.S. Commodity Futures Trading Commission (CFTC) Commissioner Kristin Johnson clarified that Binance, the world's largest cryptocurrency exchange, was penalized for rule violations rather than fraudulent activities. Johnson made these remarks during a digital asset summit hosted by the Financial Times on Dec. 5.
According to Crypto.News, Johnson indicated at the summit that Binance's multi-agency settlement with the CFTC and the Departments of Justice and Treasury resulted from the company's non-compliance with rules, not from fraud or other criminal activities.
During the summit, Johnson stated that the CFTC took enforcement action against Binance because the company "simply failed to comply with regulation." She went on to say, "There's a common assumption that enforcement actions in the crypto or digital assets ecosystem connote bad actors or bad conduct," but in Binance's case, "the matter and the resolution of the litigation did not involve any allegation of fraud or similar misconduct."
On Nov. 21, it was announced by the Department of Justice that a settlement had been reached with Binance. As per a press release, under this agreement, Binance committed to pay $4.3 billion in penalties and agreed to allow a third-party monitor access to its transactions and accounts.
In response to this settlement, Binance acknowledged in a Nov. 21 post that while it is "not perfect," its primary goal since its inception has been user protection. The post admitted that, despite significant investments in compliance and security measures, past controls were inadequate. "Binance grew at an extremely fast pace globally, in a new and evolving industry that was in the early stages of regulation, and Binance made misguided decisions along the way," read part of the post. It concluded by stating, "Today, Binance takes responsibility for this past chapter."
As part of their commitment towards better compliance, Binance announced a change in leadership. Co-founder Changpeng Zhao (CZ) was replaced as CEO by Richard Teng, the company’s former Global Head of Regional Markets.
