In the wake of former Binance CEO Changpeng Zhao’s guilty plea, cryptocurrency exchange Binance.US is encountering regulatory challenges in the United States. Regulators in Florida and Alaska have informed Exchange.US that it is no longer permitted to provide services to residents in those states, as reported by The Wall Street Journal on January 25.
The Alaska Division of Banking and Securities reportedly refused to renew Binance.US’s license in January 2024. TronWeekly sought a comment from the agency regarding the denial, but no response was received at the time of publication.
Florida’s Office of Financial Regulation has issued an emergency suspension order against Binance.US’s money transmitter license. This suspension came a week after Changpeng Zhao, also known as CZ, pleaded guilty to charges of violating U.S Anti-Money-Laundering policies on November 21, 2023.
Binance.US Operations Unfazed By CEO’s Guilty Plea And Governance Shift
In December, a U.S. federal court accepted Zhao’s guilty plea to one count of Bank Secrecy Act violations. As part of the settlement deal, Zhao stepped down as Binance.US chair and transferred his voting rights through a proxy agreement, eliminating his influence on the firm’s governance.
Despite the global Exchange facing government actions, its local business, Exchange.US, continued operations in the United States. On November 28, the U.S. exchange asserted, “We remain fully operational and are committed to continuing to serve our customers with the same products and services as we always have.”
In late December, regulators in Arkansas, Illinois, and South Dakota reportedly reached an agreement with Binance.US to allow its operations in those states. As a condition, Exchange must ensure the irreversible transfer of Zhao’s voting rights.
Following his guilty plea, Zhao attempted to pledge his $4.5 billion stake in exchange as security to be allowed 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.
Zhao is scheduled to be sentenced on February 23, 2024, and could face up to 18 months in prison.
