North Dakota has become the latest US state to revoke Binance.US’ money transmission license, adding to the mounting regulatory pressure on the cryptocurrency exchange. This decision makes North Dakota the seventh state to ban Binance.US, joining Alaska, Florida, Maine, North Carolina, and Oregon. While the global Binance exchange has been under intense scrutiny, its US affiliate had managed to continue operations until now.
The state’s financial authority issued an order this week citing Binance.US for not complying with local regulations. The order also highlighted that Changpeng Zhao, Binance’s founder and majority shareholder, had pleaded guilty to violating US anti-money laundering laws. Zhao is currently serving a four-month prison sentence in the US for money laundering offenses, yet he remains the primary shareholder of Binance. Binance.US did not respond to requests for comment.
Prosecutors have accused Binance of operating with inadequate security measures, which they claim facilitated criminal activities. These lapses allegedly allowed numerous suspicious transactions to go unnoticed, some of which were purportedly linked to designated terrorist groups. Moreover, prosecutors alleged that Binance failed to report transactions related to child sexual abuse materials and that it received a significant portion of ransomware proceeds. As part of a settlement, Binance agreed to pay a $4.32 billion penalty. Additionally, Zhao was fined $50 million by criminal courts and another $50 million by the US Commodity Futures Trading Commission.
Despite these challenges, Binance has had some victories. In May, a Florida state appeals court overturned the state’s decision to block Binance.US from operating, ruling that regulators had not provided sufficient justification for their actions.
According to North Dakota regulators, Binance.US violated the Money Transmitters Act by failing to maintain adequate permissible investments and an effective anti-money laundering program. The regulator stated that revoking the license was essential to protect citizens from illicit activities and transactions.
The regulatory actions against Binance underscore the importance of robust compliance measures in the cryptocurrency industry. As the landscape evolves, exchanges must prioritize security and transparency to maintain trust and legitimacy. Stay updated on the latest developments in the cryptocurrency world to understand how these changes might affect your investments and the broader market.
