North Dakota Revokes Binance US’s Money Transmitter License Over Compliance Concerns and Legal Issues

In a significant move, the North Dakota Department of Financial Institutions has revoked Binance US’s money transmitter license, citing the company’s failure to comply with state laws and the ongoing legal issues of its founder, Changpeng Zhao. This decision deals a major blow to the cryptocurrency exchange’s operations within the United States.

Non-Compliance with North Dakota Laws

The revocation comes after Binance US, operating under BAM Trading Services, Inc., was found in violation of North Dakota’s regulations. The state’s Department of Financial Institutions announced that the company failed to adhere to state laws, leading the Commissioner to revoke its license.

Legal Challenges Faced by Changpeng Zhao

Changpeng Zhao, Binance’s founder, has been embroiled in legal troubles, including a felony conviction for violating federal anti-money laundering laws. In April, Zhao pleaded guilty to these charges, resulting in a four-month prison sentence for his involvement. This conviction played a significant role in North Dakota’s decision, raising doubts about the company’s regulatory compliance capabilities.

Previous Revocations and Declinations

North Dakota is not alone in its actions against Binance US. Other states like Alaska, Florida, Maine, North Carolina, and Oregon have also revoked or declined to renew the exchange’s licenses. Notably, Florida chose not to revoke the license despite Zhao’s guilty plea in November 2023.

Insufficient Anti-Money Laundering Program

The announcement pointed out that Binance US’s anti-money laundering program was found lacking. The company’s lack of transparency and cooperation during the investigation further concerned regulators. Binance US’s failure to provide necessary documents and records for compliance severely breached regulatory standards and trust.

Lack of Cooperation and Trust

A significant factor in the revocation was Binance US’s lack of cooperation with regulators. Concerns about the company’s transparency and commitment to regulatory compliance were heightened by Zhao’s conviction and the company’s ongoing non-compliance, leading to the license’s revocation.

Implications for Binance US

The loss of the money transmitter license in North Dakota marks a major setback for Binance US’s operations in the country. This decision could trigger similar actions from other states, casting doubt on the exchange’s future in the US market. Ensuring regulatory compliance and rebuilding trust with regulators will be critical for Binance US moving forward.

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