Recently, Commissioner Kristin Johnson stated that the multibillion-dollar fine imposed on Binance by the CFTC has been “increased”.
In addition, Johnson explained that the agency has initiated legal actions against the cryptocurrency exchange due to non-compliance with regulations, without making allegations of misconduct. Let’s see all the details below.
Summary
Binance cited for regulatory violations, not misconduct, says CFTC
As anticipated, the multibillion-dollar sanctions imposed by the US regulatory authority, the Commodity Futures Trading Commission (CFTC), against the cryptocurrency exchange Binance have been “increased”.
This is in response to the repeated public warnings addressed to companies in the sector to comply with regulations.
This is what Commissioner Kristin Johnson stated during an event organized by the Financial Times today.
Johnson specified that the executive action against the world’s largest cryptocurrency exchange was taken because Binance “simply did not comply with regulations”.
As we know, in the previous month, Binance has attracted attention for agreeing to pay one of the largest fines in corporate history, amounting to 4.3 billion dollars.
The fine was issued for charges of money laundering and other illegal activities, by the CFTC, the Department of Justice, and other US government agencies.
The details of the fine, without allegations of misconduct, to Binance
As part of an agreement, Binance has agreed to pay 1.35 billion dollars in civil penalties and the same amount to the Commodity Futures Trading Commission (CFTC) to resolve a lawsuit dating back to March.
The accusation claimed that Binance operated an unlicensed cryptocurrency derivatives trading platform in the United States, attempting to conceal such activity from regulatory authorities.
The founder of Binance, Changpeng “CZ” Zhao, has resigned as part of the agreement and paid a fine of 150 million dollars to the agency.
Commissioner Kristin Johnson explained that, despite executive actions in the cryptocurrency sector commonly being associated with misconduct, in the case of Binance, no charges of fraud or similar illicit behavior have been made.
The action of the CFTC and the sanctions imposed, both on Binance and three DeFi platforms in September, have indeed focused on the violation of rules.
Johnson emphasized that the sanctions against Binance have increased mainly because the agency has clearly stated that companies operating in the US markets must comply with regulations, especially if they invite US customers to participate.
However, despite the criticism from the cryptographic industry towards the strict actions of the US regulatory authorities, the CFTC has defended its thorough methodology in determining civil penalties, without accusing Binance of misconduct during the controversy.
News from Binance: zero commission trading for selected pairs and the FDUSD stablecoin
Recently, Binance announced an opportunity for users to take advantage of zero commission trading on several pairs, including XRP/FDUSD, SOL/FDUSD, DOGE/FDUSD, BNB/FDUSD, ETH/FDUSD, and LINK/FDUSD.
The offer will be valid from December 8 “until further notice”.
During this promotional period, all users will be able to benefit from zero maker and taker fees for the mentioned spot and margin trading pairs.
The trading volume on these pairs will be excluded from the calculation of the VIP level volume and from all liquidity provider programs, where applicable, during the offer.
FDUSD is a reserve-backed stablecoin issued by a subsidiary of the financial company First Digital Limited, based in Hong Kong, and it was issued on the Ethereum and BNB chains at the time of launch.
The company has also stated that support for BUSD products will be discontinued in mid-December, inviting customers to withdraw or convert their BUSD holdings into other assets by that date.
Transactions related to it will be disabled on December 31, 2023 and the remaining balances will be automatically converted to FDUSD at a conversion rate of 1:1.
Users from Binance in Japan, France, Italy, Poland, and Kazakhstan are excluded from these changes.
In addition, Binance announced the removal of four cryptocurrencies from its platform on December 7th: BitShares (BTS), PERL.eco (PERL), Tornado Cash (TORN), and Waltonchain (WTC).
Some of these assets have experienced significant declines in value following the disclosure, with PERL down 60% in the last two weeks and WTC down over 70%.
