A senior commissioner at the Commodity Futures Trading Commission (CFTC) stated that it’s unlikely we’ll see a penalty brought against a crypto firm that can exceed the $4.3 billion in fines that Binance agreed to pay.
CFTC commissioner Kristin Johnson told the audience at a recent crypto summit that she hopes the landmark case against Binance “will really be a bit of a cautionary tale.” The commissioner added that Binance’s penalties established “guardrails” to bring “order and structure” to the market, Reuters reports.
“My hope would be that we have seen a spike, and what we will see going forward is that these early cases will really be a bit of a cautionary tale for those firms that really do want to successfully operate in this ecosystem,” Johnson said.
At the same summit, Johnson added that Binance’s penalties were “heightened” because the crypto exchange had been warned plenty of times before that it must comply with regulations.
The commissioner added that the settlement of the case “did not involve any allegation of fraud or similar misconduct.” These sentiments are echoed by Binance chief Changpeng Zhao, who controversially posted that “in our resolutions with US agencies they do not allege that Binance misappropriated any user funds, and do not allege that Binance engaged in any market manipulation.”
That said, Johnson added that the CFTC is “deep and careful” in its preparation before deciding civil penalties. Binance’s penalties were mostly heightened because the CFTC has publicly reiterated several times that it needs to comply, and it still failed to.
Binance’s $4.3 billion penalty marked the largest settlement to be reached with a crypto firm, and simultaneously settled several cases with other US agencies. However, it didn’t get rid of the Securities and Exchange Commission’s (SEC) lawsuit against Binance, which claims that the exchange and CZ engaged in massive wash-trading.