North Dakota’s financial market regulator has become the latest to revoke the money transmitter license of Binance.US, operated by BAM Trading Services. It has become the seventh US state to do so, as Alaska, Florida, Maine, North Carolina, and Oregon already took similar actions earlier.
Binance.US Losing US State Licenses
The order issued on 4 June 2024 highlighted that Binance.US “has not continued to meet the qualifications or satisfy the requirements that apply to an applicant for a new money transmission license.”
Justifying the move, the regulator noted that the license cancellation was “necessary and appropriate in the public interest for the protection of citizens to restrain unlawful acts, practices, or transactions.”
While North Dakota was the latest state to revoke Binance.US’s license, the state regulator in Florida was the first to do so last November, shortly after the Justice Department’s settlement with Binance.com and Zhao’s guilty plea. North Carolina and Maine followed by revoking the license in January.
Meanwhile, Binance.US paused the onboarding of new users in Connecticut, Georgia, Ohio, Minnesota, and Washington. The exchange never received a license in New York, Texas, Vermont, and Hawaii.
The Troubles of Binance
Binance.US operated separately from its global parent Binance.com and was operated by BAM Trading Services, which was created in 2019. However, the US state regulator pointed out that the US arm shared a similar name with the global counterpart and even used the “same branding and copyrighted logos under license as Binance.com, engages in a similar business line as Binance.com, and uses Binance.com’s proprietary software under license to conduct transactions for Binance.US.”
Furthermore, Changpeng Zhao, the former CEO of Binance.com and now a convict, also indirectly owns the US arm of Binance.com and “exercised control” over the entity. Despite his being in jail now, he continues to be a majority shareholder of Binance.com.
Last November, Binance.com settled with the US Department of Justice, paying a hefty sum of $4.3 billion. The exchange paid an additional $2.85 billion to the US commodities regulator. Under the settlement terms, Binance.com agreed to exit the US market completely. Notably, the settlement was reached only by Binance.com, not Binance.US.
Zhao also pled guilty to violating one count of the Bank Secrecy Act and has received a jail term of four months.
However, actions against Binance.com also…
