North Dakota has now joined the growing list of US states that have banned Binance’s operations, with the state’s financial regulatory authority withdrawing Binance.US’ money transmission license. This decision makes North Dakota the seventh state to take such action, following in the footsteps of Alaska, Florida, Maine, North Carolina, and Oregon. Despite facing regulatory scrutiny at the national level, Binance’s domestic affiliate had continued to operate within the country.
The state issued an order this week citing that the US subsidiary failed to comply with North Dakota’s regulations. The order also mentioned Changpeng Zhao, the majority beneficial owner of the subsidiary, who had pleaded guilty to charges related to violations of US anti-money laundering laws. Binance.US did not respond to requests for comment from Cryptonews.
Zhao, who is currently serving a four-month prison sentence in the US for money laundering offenses, remains the primary shareholder of Binance. The crackdown on Binance comes after the exchange was criticized for its lax security measures, which allegedly allowed criminal activities to thrive on the platform. Prosecutors claimed that the lack of oversight led to suspicious transactions, potentially involving designated terrorist groups, slipping through the cracks. Additionally, they accused Binance of failing to report transactions related to child sexual abuse materials and profiting from ransomware attacks. As part of a settlement, Binance agreed to a $4.32 billion penalty, with Zhao personally paying a $50 million criminal fine and an additional $50 million to the US Commodity Futures Trading Commission.
The North Dakota regulator stated that Binance.US had not maintained adequate permissible investments and an effective anti-money laundering program, thereby violating the Money Transmitters Act. The regulator justified revoking the license as necessary to protect citizens from unlawful activities, practices, or transactions.
In a separate development, a state appeals court in Florida overturned a block on Binance US operations, ruling that the regulators had not provided sufficient justification for their decision to prohibit the company from operating within the state.
