Florida Appeals Court Overturns Suspension of Binance.US's License - Uncertainty Remains
Summary:
The Florida First District Court of Appeal has overturned the suspension of Binance.US's money-services business license by the state's Office of Financial Regulation (OFR), citing lack of legal justification. The OFR had issued a suspension following Binance CEO Changpeng Zhao’s guilty plea for violating U.S. Anti-Money Laundering law. The court highlighted that the suspension put more than 170,000 state account holders at risk of significant financial losses and tax liabilities. This ruling, however, is still open for further appeal.
Breaking news from Florida signifies a critical win for Binance.US in its bid to overturn the halt on its money-services business license by the state. The Florida First District Court of Appeal has declared that the Office of Financial Regulation (OFR)'s emergency suspension order against Binance.US had no solid legal ground. It can be recalled that the temporary halt on Binance.US's license was prompted by the guilty plea of the firm's CEO, Changpeng Zhao in a federal court for contravening the country's Anti-Money Laundering laws on November 21, 2023.
Citing state law, the ruling from the appeal court indicated that the state regulator "may" freeze any money-services license in a manner deemed justifiable given the nature of circumstances, provided the regulatory body offers tangible reasons to prove its fairness. However, the court pointed out that the regulator hadn't considered less severe measures apart from suspension, adding that the "may" present in the statute stressed discretion instead of compulsion, and thus a mere referral to the law couldn't be adequate ground for license suspension.
The court also noted that the prohibition of Binance.US's license puts more than 170,000 account holders in the state at risk of substantial financial losses and tax obligations. The immediate implementation of the Emergency Suspension Order (ESO) would necessitate the liquidation of every consumer's digital asset holdings, thereby resulting in potential financial harm due to volatile digital asset prices. However, it's important to note that this ruling can still be contested in court.
Following Zhao’s guilty plea, the OFR froze Binance.US’s license within a week, making Florida the first in a series of states to initiate such measures. On March 25, Binance countered the decision with an appeal which isn't publicly accessible yet. On its official site, Binance.US mentioned that they have temporarily put new user registrations on hold within the state.
Other states like Alaska, Maine, North Carolina, and Oregon have either put a pause on Binance.US activities or denied renewal of its license this year. The company's status remains uncertain in both Georgia and Ohio while it never functioned as a crypto exchange in Hawaii, Minnesota, New York, Texas, and Vermont.
No immediate comment was available from the Florida OFR when approached by Cointelegraph to offer remarks on the case.
Published At
5/22/2024 8:25:49 PM
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