After reaching a $4.3 billion settlement with the U.S. Department of Justice, Binance and its founder Zhao Changpeng (CZ) continue to serve U.S. customers through Binance.US, but face greater regulatory challenges. Recently, the states of Florida and Alaska have notified Binance.US that the platform can no longer provide services to their residents.
Binance and CZ reached a record-breaking $4.3 billion settlement with the U.S. Department of Justice in late November last year. Binance.com can no longer allow U.S. customers to use the platform, but its local business, Binance.US, can still provide services to U.S. customers. However, this institution is facing pressure from U.S. regulatory agencies.
According to The Wall Street Journal, regulatory authorities in Florida and Alaska have informed Binance.US that the cryptocurrency exchange cannot provide services to their residents.
Alaska’s banking and securities department refused to renew Binance.US’s license in January this year, while the Florida Office of Financial Regulation issued an emergency suspension order on Binance.US’s money transmission license shortly after CZ’s guilty plea.
After reaching a settlement with the U.S. Department of Justice last year, CZ admitted to violating the Bank Secrecy Act in a federal court in Seattle and resigned as CEO. This included resigning from the board of directors of Binance.US and transferring his voting rights to current CEO Norman Reed, as well as agreeing to pay a $50 million fine.
As of the end of December last year, Binance.US was still allowed to operate in Arkansas, Illinois, and South Dakota. However, regulatory authorities in these states have required CZ not to regain his voting rights in Binance.US.
CZ’s sentencing hearing is scheduled for February 23 this year, and he faces a maximum of 18 months in prison. During this period, CZ attempted to return home and even pledged $4.5 billion worth of Binance.US shares as collateral to assure that he would not flee, in order to be allowed to go to Abu Dhabi for recuperation. However, his request was denied by Judge Jones in a closed-door hearing, according to court records.
Before this request, U.S. prosecutors believed that CZ had a risk of flight for the following four reasons, and therefore requested that the judge restrict CZ from leaving the United States until the sentencing result is announced:
1. CZ’s wealth background: As a billionaire, CZ has a considerable amount of wealth that may not be accessible to U.S. authorities.
2. Uniqueness of residence: CZ resides in the United Arab Emirates, a country that does not have an extradition treaty with the United States.
3. Family factors: He has family in the UAE and may choose to stay there once he returns, unwilling to face a U.S. prison sentence.
4. Attitude towards sentencing: Although CZ pleaded guilty voluntarily, there is still a high possibility that he may choose not to return to the United States to face the sentencing.
Related reports:
– Binance.US: Zhao Changpeng (CZ) resigns as chairman of the board and transfers voting rights, no longer involved in Binance.US governance.
– After the CZ era, what changes will Binance and the cryptocurrency market experience?
– Binance’s $4.3 billion settlement ranks second! A quick look at the top 15 cryptocurrency law enforcement actions in the United States.