In the aftermath of former Binance CEO Changpeng Zhao’s guilty plea, Binance.US finds itself in the eye of a regulatory storm, with both Florida and Alaska regulators making significant moves that could spell trouble for the cryptocurrency exchange’s ability to serve residents in these states.
According to a recent report by The Wall Street Journal on January 25, regulators in Florida and Alaska have sent a clear message to Binance.US: they can no longer accommodate the crypto needs of their residents.
In a noteworthy twist, the Alaska Division of Banking and Securities opted not to renew Binance.US’s license in January 2024. Despite diligent efforts to seek clarification, Cointelegraph’s inquiries to the agency regarding this denial remained unanswered at the time of publication.
Meanwhile, Florida’s Office of Financial Regulation took more direct action by issuing an emergency suspension order against Binance.US’s money transmitter license. This suspension came a mere week after Binance’s founder and former CEO, Changpeng Zhao, commonly known as CZ, pleaded guilty to violating U.S. Anti-Money Laundering policies on November 21, 2023.
December 2023 witnessed a U.S. federal court accepting Zhao’s guilty plea on one count of Bank Secrecy Act violations. As part of the settlement agreement, Zhao relinquished his position as Binance.US chair and ceded his voting rights through a proxy agreement, effectively nullifying his influence over the firm’s governance.
Despite the U.S. government’s actions against the global Binance exchange, its domestic subsidiary, Binance.US, persisted in operating within the country. In a statement released on November 28, the U.S. exchange assured its customers of uninterrupted service, stating, “We remain fully operational and are committed to continuing to serve our customers with the same products and services as we always have.”
Towards the close of December, regulators in Arkansas, Illinois, and South Dakota reached an agreement with Binance.US, allowing it to continue operations in these states. However, this agreement came with the stipulation that Binance.US make Zhao’s voting rights transfer irrevocable.
Following his guilty plea, Changpeng Zhao endeavored to offer his $4.5 billion stake in Binance.US as security to secure permission to travel to his home in the United Arab Emirates. Court records reveal that Judge Richard Jones denied this request in a private hearing on December 29.
As the cryptocurrency community keenly observes these unfolding events, Changpeng Zhao is slated to be sentenced on February 23, 2024, potentially facing up to 18 months in prison. The future of Binance.US in the United States remains uncertain as regulatory challenges persist, making it a narrative worth monitoring in the ever-evolving crypto landscape.
