Binance.US License Revoked in Oregon, Marking Another Regulatory Blow for Cryptocurrency Exchange
Summary:
Oregon becomes the sixth state to terminate Binance.US's license, following similar actions in five other states due to the former CEO's violation of Anti-Money Laundering laws. Further issues have arisen for the cryptocurrency exchange, including mass layoffs and a lawsuit from the U.S. Securities and Exchange Commission (SEC) alleging failure to register appropriately and engagement in manipulative trading practices.
Binance.US, the American arm of the global cryptocurrency exchange, has endured another setback, with its operational license being revoked in its sixth state, Oregon. The decision was announced by the Oregon Division of Financial Regulation on April 30, who cited the demonstrated criminal behavior of the former CEO of Binance, Changpeng Zhao, as the justification for termination. The legal action restrains Binance.US from various financial activities involving Oregon residents, including the transmission of funds as well as managing and trading fiat and cryptocurrency.
This comes in the wake of similar licensing denials or suspensions in five other states, prompted by Zhao's admission of breaking Anti-Money Laundering regulations. Florida was the initial state to enforce these restrictions in November, shortly after Zhao's confession, and Alaska followed in the new year by declining to extend the license. Subsequently, North Carolina and Maine suspended and declined to renew respectively in January, and Connecticut did the same towards the end of April.
Interestingly, Binance.US hasn't gained licenses in states like New York, Texas, Vermont, and Hawaii. Information available on the Binance.US website offers conflicting data regarding Georgia and Ohio, listing inability to serve in one section, and claiming licensing in another. Binance.US inaugurated a regional center in Georgia with a 25-strong team in March 2023. However, the Minnesota license does not include exchange or transmission of digital currency, according to Binance.US customer support.
Issues outside licensing matters are also plaguing Binance.US. In a December court deposition, COO Christopher Blodgett declared that due to resistance from U.S. banks, the cryptocurrency exchange had to make significant layoffs, signifying a drastic hit to the organization.
To add to this, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the entity in June, alleging that Binance.US had not adhered to necessary registrations as an exchange, broker, and clearinghouse. The SEC further accused the exchange of allowing manipulative trades, participating in wash trading, and misallocating funds in conjunction with its parent company, Binance. Binance.US came into being in 2019 to cope with regulatory demands.
Published At
5/2/2024 12:30:00 AM
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