Binance.US Faces Increased Regulatory Pressure, Ex-CEO Zhao Awaits Sentencing
Summary:
Binance.US, the troubled cryptocurrency exchange, continues to confront regulatory challenges in the United States following the past CEO's guilty plea. Alaska and Florida regulators have restricted Binance.US from serving their citizens. The former Binance CEO, Changpeng Zhao, admitted to violating U.S anti-money laundering laws. Following his confession, Zhao relinquished his voting rights and stepped down as chair of Binance.US. Despite facing regulatory issues, Binance.US vows to continue its operations in the country, and regulators from Arkansas, Illinois, and South Dakota have allowed the exchange to operate within their states. Zhao is set to be sentenced on February 23, 2024, and could face up to 18 months in prison.
Binance.US, a beleaguered cryptocurrency exchange, continues to grapple with regulatory scrutiny in the United States, following the guilty plea from its previous CEO. Regulators in Florida and Alaska have restricted Binance.US from catering to their residents, as reported by The Wall Street Journal on January 25th. Alaska's Banking and Securities division reportedly refused to extend Binance.US's license in January 2024, and the company’s request for comment on this refusal went unanswered at press time. Simultaneously, Florida's Financial Regulation Office issued an immediate suspension on Binance.US's money transfer license. This action took place just one week after Changpeng Zhao, also known as CZ, the founder and ex-CEO of Binance, confessed to breaking U.S anti-money laundering regulations on November 21, 2023. In the following month, a U.S federal court accepted Zhao’s admission of guilt regarding a single violation of the Bank Secrecy Act. As part of reaching a settlement, Zhao resigned as chair of Binance.US and divested his voting rights through a proxy deal, thus ending his role in the company's decision-making process. Even amid actions taken by the U.S government against the international arm of Binance, Binance.US continued its operations within the country. On November 28, the U.S branch stated, “Our operations remain unaffected and we continue our commitment to providing the same products and services to our customers.” Towards the end of December, regulators from Arkansas, Illinois, and South Dakota purportedly agreed to terms that would let Binance.US continue its operations within their jurisdictions. Under these terms, the transfer of Zhao’s voting rights must be irreversible. Since his admission of guilt, Zhao has attempted to pledge his $4.5 billion equity in Binance.US as security to get permission to travel back to his residence in the United Arab Emirates. But on December 29, Judge Richard Jones declined this request during a private hearing, according to court documents. Zhao is to be sentenced on February 23, 2024, and could spend up to 18 months in prison.
Published At
1/26/2024 1:01:28 PM
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