Binance.US Faces Regulatory Heat Following CEO’s Guilty Plea

Following the guilty plea of former CEO Changpeng Zhao, Binance.US is facing regulatory problems, with authorities in Florida and Alaska dealing a blow to the cryptocurrency exchange. The Florida Office of Financial Regulation has placed an emergency suspension order against the exchange, while the Alaska Division of Banking and Securities has failed to renew Binance.US’s license, according to a report published in The Wall Street Journal on January 25.

Alaska and Florida Take a Stand

The Alaska Division of Banking and Securities took a decisive step in January 2024 by rejecting the renewal of Binance.US’s license. Simultaneously, the Florida Office of Financial Regulation escalated its actions a week after Zhao’s guilty plea, a development linked to violations of US Anti-Money Laundering laws on November 21, 2023.

Despite these setbacks, Binance.US remains operational in the US, asserting its commitment to serving customers with the same dedication. The company’s resilience contrasts with the challenges posed by government actions against the broader global Binance exchange.

State regulators in Arkansas, South Dakota, and Illinois, however, reportedly struck a deal with Binance.US in December. This agreement allows the exchange to continue operations, contingent on the irreversible transfer of Zhao’s voting rights, a condition set forth in the agreement.

Changpeng Zhao resigned as CEO of Binance.US after entering a guilty plea to one count of violating the Bank Secrecy Act in a US federal court. In order to remove his influence over the firm’s governance, a proxy agreement was put in place to transfer his voting rights.

In a bizarre turn of events, Zhao attempted to secure a temporary visa to the United Arab Emirates by using his $4.5 billion ownership in Binance.US as collateral. On December 29, nevertheless, Judge Richard Jones turned down this motion during a private hearing.

Zhao is scheduled for sentencing on February 23, 2024, and an 18-month federal jail sentence might be imposed on him while the legal drama plays out. The regulatory environment and Binance.US’s future are still being actively monitored, which highlights the constantly changing problems in the cryptocurrency market.