News
Binance.US lost money transmission license in seven US states
The North Dakota Financial Markets Regulatory Authority was the latest to revoke the money transfer license of Binance.US, operated by BAM Trading Services. It became the seventh U.S. state to do so, as Alaska, Florida, Maine, North Carolina and Oregon have taken similar actions previously.
The order issued on June 4, 2024 noted that Binance.US “has not continued to meet the qualifications or requirements that apply to an applicant for a new money transmission license.”
Justifying the move, the regulator noted that the cancellation of the license was “necessary and appropriate in the public interest for the protection of citizens and to curtail unlawful acts, practices or transactions”.
While North Dakota was the last state to revoke Binance.US’s license, Florida’s state regulator 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 then revoked the license in January.
In the meantime, Binance.US suspended new user onboarding in Connecticut, Georgia, Ohio, Minnesota and Washington. The exchange has never been licensed in New York, Texas, Vermont and Hawaii.
Binance’s problems
Binance.US operated separately from its global parent Binance.com and was operated by BAM Trading Services, created in 2019. However, the US state regulator pointed out that the US arm shared a similar name with its global counterpart and used even the name “same trademark and logos copyrighted under license as Binance.com, is engaged in a similar line of business to 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 detained, also indirectly owns the US division of Binance.com and “exercised control” over the entity. Although he is now in prison, he continues to be a majority shareholder of Binance.com.
Last November, Binance.com settled with the US Department of Justice, paying the considerable sum of $4.3 billion. The exchange paid another $2.85 billion to the US commodities regulator. According to the terms of the transaction, Binance.com has agreed to exit the US market completely. Notably, the agreement was only reached by Binance.com, not Binance.US.
Zhao also pleaded guilty to violating one count of the Bank Secrecy Act and did so he received a four-month prison sentence.
However, the actions against Binance.com also had an indirect impact on the operations of Binance.US. The platform also faced SEC actions, which led to the loss of 75% of its revenue. Even the entity fired most of the staff in the last months.
The North Dakota Financial Markets Regulatory Authority was the latest to revoke the money transfer license of Binance.US, operated by BAM Trading Services. It became the seventh U.S. state to do so, as Alaska, Florida, Maine, North Carolina and Oregon have taken similar actions previously.
The order issued on June 4, 2024 noted that Binance.US “has not continued to meet the qualifications or requirements that apply to an applicant for a new money transmission license.”
Justifying the move, the regulator noted that the cancellation of the license was “necessary and appropriate in the public interest for the protection of citizens and to curtail unlawful acts, practices or transactions”.
While North Dakota was the last state to revoke Binance.US’s license, Florida’s state regulator 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 then revoked the license in January.
In the meantime, Binance.US suspended new user onboarding in Connecticut, Georgia, Ohio, Minnesota and Washington. The exchange has never been licensed in New York, Texas, Vermont and Hawaii.
Binance’s problems
Binance.US operated separately from its global parent Binance.com and was operated by BAM Trading Services, created in 2019. However, the US state regulator pointed out that the US arm shared a similar name with its global counterpart and used even the name “same trademark and logos copyrighted under license as Binance.com, is engaged in a similar line of business to 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 detained, also indirectly owns the US division of Binance.com and “exercised control” over the entity. Although he is now in prison, he continues to be a majority shareholder of Binance.com.
Last November, Binance.com settled with the US Department of Justice, paying the considerable sum of $4.3 billion. The exchange paid another $2.85 billion to the US commodities regulator. According to the terms of the transaction, Binance.com has agreed to exit the US market completely. Notably, the agreement was only reached by Binance.com, not Binance.US.
Zhao also pleaded guilty to violating one count of the Bank Secrecy Act and did so he received a four-month prison sentence.
However, the actions against Binance.com also had an indirect impact on the operations of Binance.US. The platform also faced SEC actions, which led to the loss of 75% of its revenue. Even the entity fired most of the staff in the last months.