Regulators in Florida and Alaska said Binance.US can no longer serve its residents after former CEO Changpeng Zhao’s guilty plea.
Troubled cryptocurrency exchange Binance.US continues to face pressure from regulators in the United States in the aftermath of the former Binance CEO’s guilty plea.
Regulators in Florida and Alaska have told Binance.US that the crypto exchange can no longer serve its residents, The Wall Street Journal reported on Jan. 25.
The Alaska Division of Banking and Securities reportedly denied a renewal of Binance.US’s license in January 2024. Cointelegraph approached the agency for a comment regarding the denial but did not receive a response at the time of publication.
Florida’s Office of Financial Regulation has also issued an emergency suspension order against Binance.US’s money transmitter license. The suspension reportedly came a week after Binance’s founder and former CEO Changpeng Zhao, also known as CZ, pleaded guilty to charges of violating U.S Anti-Money-Laundering policies on Nov. 21, 2023.
In December, a U.S. federal court subsequently accepted Zhao’s guilty plea to one count of Bank Secrecy Act violations. As part of the settlement deal, Zhao stepped down as Binance.US chair and transferred his voting rights through a proxy agreement, removing his influence on the firm’s governance.
Despite the U.S. government’s action against the global Binance exchange, its local business, Binance.US, continued to operate in the country. “We remain fully operational and are committed to continuing to serve our customers with the same products and services as we always have,” the U.S. exchange wrote on Nov. 28.
In late December, regulators in Arkansas, Illinois and South Dakota reportedly reached an agreement with Binance.US that would allow it to keep operating in those states. As part of that, Binance.US must make the transfer of Zhao’s voting rights irreversible.
After pleading guilty, Zhao has attempted to pledge his $4.5 billion stake in Binance.US as security to be permitted to travel to his home in the United Arab Emirates. According to the court records, Judge Richard Jones denied his request in a private hearing on Dec. 29.
Zhao is set to be sentenced on Feb. 23, 2024 and faces up to 18 months in prison.