- Regulatory challenges are mounting for the US arm of crypto exchange Binance.
- Several states in the United States are taking action against the exchange.
- Enforcement proceedings against Binance and its founder culminated in significant repercussions last year.
Over the past year, crypto exchange Binance has drawn the ire of several financial authorities, facing scrutiny for regulatory violations and alleged illegal operations across various regions. The exchange’s unfortunate chapter has extended to its United States arm, which has recently become the focal point of investigations in several states, resulting in operational suspensions and subsequent bans.
While Binance.US is still reeling from its troubles, another US state has imposed restrictions on its operations.
North Dakota Cranks Up Heat on Binance
Binance.US’s regulatory woes have further escalated as the North Dakota Department of Financial Institutions (DFI) becomes the latest to revoke its money transmitter license. Recent court documents revealed that the commission accused the exchange of non-compliance with local regulations and violating the state’s money transmitter laws.
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North Dakota DFI emphasized that the exchange has engaged in acts and transactions prohibited under the region’s laws, deeming it appropriate to restrict its operations to safeguard public interest.
Another focal point of discussion was Binance’s regulatory woes with the United States Department of Justice. DFI commissioner Lise Kruse spotlighted the conviction of the exchange’s founder Changpeng “CZ” Zhao, following his guilty plea to anti-money laundering violations in November 2023.
“Binance’s “majority beneficial owner and control person,” Zhao, was recently convicted on felony charges for violating federal anti-money laundering laws," stated commissioner Kruse, adding that “The Commissioner finds the Respondent does not continue to meet the qualifications or satisfy requirements that may apply to an applicant for a new money transmitter license”
Binance.US has updated its list of unsupported countries to include North Dakota, along with several other states facing similar troubles.
Binance.US’ Battle of Bans
From Florida to Alaska, and Oregon, Binance.US has faced regulatory scrutiny across multiple regions this year.
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On November 29, 2023, the Florida Office of Financial Regulation initiated regulatory actions against the exchange, citing “immediate danger” to the public as justification for an emergency suspension. The regulators similarly leveraged the conviction of Binance founder, Zhao, asserting the necessity of an operation ban due to the egregious misconduct.
Other states followed suit, including Oregon, Alaska, Maine, and North Carolina, many of which pursued similar actions to restrict the exchange’s operations or deny its license renewal.
Binance.US is additionally unable to onboard new users in multiple regions and is entirely inaccessible to users in over ten states across the United States.
On the Flipside
- Former Binance CEO and founder Changpeng Zhao is currently serving a four-month prison sentence.
- Binance is locked in a regulatory tussle with the Nigerian government, which has resulted in the 100-day detention of one of its executives.
- Binance.US has until July 17, 2024, to challenge North Dakota’s regulatory decision.
Why This Matters
The regulatory challenges facing Binance.US in North Dakota add to the exchange’s already fragile reputation in the United States, and its ability to navigate these mounting troubles will be crucial in determining its future in the country.
Read more about Binance’s regulatory woes in Nigeria and the detention of its executive:
Binance Exec’s Nigeria Detention Extends as Bail Hearing Stalls
The SEC is letting Ethereum off its hook, read this article to find out more:
Ethereum Scores Victory in SEC Probe, Is the Fight Over?
