Binance.US, the troubled cryptocurrency exchange, is experiencing further regulatory challenges as regulators in Florida and Alaska have informed the platform that it can no longer serve residents in those states, as reported by The Wall Street Journal on January 25. The Alaska Department of Banking and Securities reportedly declined to renew Binance.US's license in January 2024. The Florida Office of Financial Regulation also issued an emergency suspension of Binance.US’s money transfer license. These regulatory actions follow the guilty plea of former Binance CEO Changpeng Zhao, also known as CZ, who admitted to violating U.S. anti-money laundering policies on November 21, 2023.
In December 2023, a U.S. federal court accepted Zhao's guilty plea to one count of violating the Bank Secrecy Act. As part of the settlement, Zhao resigned as chairman of Binance.US and transferred his voting rights through a proxy agreement, eliminating his influence over the company's governance. Despite the U.S. government's actions against the global Binance exchange, its local operation Binance.US has continued its operations within the country, affirming on November 28 that it remains "fully operational and committed to continuing to provide our customers with the same products and services as we have always had."
In late December, regulators in Arkansas, Illinois, and South Dakota reportedly reached agreements with Binance.US to allow it to continue operating in those states. However, as part of these agreements, Binance.US must make the transfer of Zhao’s voting rights irreversible. Following his guilty plea, Zhao attempted to use his $4.5 billion stake in Binance.US as security to be allowed to travel to his home in the United Arab Emirates. This request was denied by Judge Richard Jones in a private hearing on December 29, according to court records. Zhao is scheduled to be sentenced on February 23, 2024, and faces a potential sentence of up to 18 months in prison.
