Cryptocurrency exchange Binance.US continues to grapple with regulatory challenges in the United States following the guilty plea of its former CEO, Changpeng Zhao, also known as CZ. Regulators in Florida and Alaska have taken significant steps to restrict Binance.US from serving residents in their respective states.
The Alaska Division of Banking and Securities has refused to renew Binance.US’s license, casting a cloud of uncertainty over the exchange’s operations in the state. This development, which took place in January 2024, underscores the growing regulatory scrutiny faced by cryptocurrency platforms in the U.S. At the time of publication, the agency had not provided any official comment on the denial.
Florida’s emergency suspension order
Florida’s Office of Financial Regulation has issued an emergency suspension order against Binance.US’s money transmitter license. This suspension comes from CZ’s guilty plea to charges related to violating U.S. Anti-Money Laundering policies on November 21, 2023. Florida authorities’ timing of this action indicates a swift response to the legal issues surrounding the exchange.
In November 2023, CZ pleaded guilty to one count of Bank Secrecy Act violations, a significant development that shook the cryptocurrency community. As part of a settlement agreement, CZ stepped down as the chair of Binance.US and relinquished his voting rights through a proxy agreement, effectively removing his influence over the firm’s governance.
These measures were taken in response to the charges against him and in an effort to mitigate the impact on the exchange’s operations.
Binance continued operation amidst regulatory pressure
Despite the U.S. government’s actions against the global Binance exchange, Binance.US continued its operations in the country, reaffirming its commitment to serving its customers with the same products and services. This determination to operate in the face of regulatory challenges underscores the resilience of the cryptocurrency industry.
In late December, Binance.US reached agreements with Arkansas, Illinois, and South Dakota regulators, allowing it to maintain operations in those states. A key condition of these agreements is the irreversible transfer of CZ’s voting rights, further distancing him from the exchange’s decision-making processes.
These agreements demonstrate the exchange’s willingness to cooperate with state authorities to ensure compliance with local regulations.
Following his guilty plea, CZ attempted to pledge his substantial $4.5 billion stake in Binance.US as security to gain permission to travel to his home in the United Arab Emirates.
However, Judge Richard Jones denied this request in a private hearing held on December 29. This decision adds another layer of complexity to CZ’s legal situation as he awaits sentencing.
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