Binance.US Snubbed in Alaska and Florida

Binance.US, a troubled cryptocurrency exchange, is facing increasing regulatory pressure in the United States following the guilty plea of its former CEO. The Wall Street Journal reported on January 25th that regulators in Florida and Alaska have informed Binance.US that it can no longer serve residents of their states. The Alaska Division of Banking and Securities rejected the renewal of Binance.US’s license in January 2024, while the Florida Office of Financial Regulation suspended its money transmitter license. reached out to the Alaska Division of Banking and Securities for a comment but received no response.

The suspension of Binance.US’s licenses in Alaska and Florida comes after the founder and former CEO of its parent company, Changpeng Zhao (CZ), pleaded guilty to charges of violating U.S. anti-money laundering policies on November 21, 2023. A U.S. federal court accepted Zhao’s guilty plea to one count of Bank Secrecy Act violations in December. As part of the settlement, Zhao stepped down as Binance.US chair and transferred his voting rights through a proxy agreement, relinquishing his influence over the company’s governance.

Despite the U.S. government’s legal actions against the global Binance exchange, its subsidiary Binance.US had been able to continue its operations in the country. On November 28th, Binance.US reassured its customers that it remained fully operational and committed to providing the same products and services as before. Later in December, it was reported that regulators in Arkansas, Illinois, and South Dakota had reached an agreement with Binance.US, allowing it to continue operating in those states under the condition that Zhao’s transfer of voting rights was made irreversible.

Following his guilty plea, Zhao attempted to use his $4.5 billion stake in Binance.US as collateral to secure permission to travel to the United Arab Emirates, where he has a home. Judge Richard Jones denied his request in a private hearing on December 29th. Zhao is now awaiting sentencing, scheduled for February 23, 2024, and could face up to 18 months in prison. The outcome of his sentencing will determine the ultimate consequences for both Zhao and Binance.US.