Binance.US announces a halt of its crypto and derivatives services to Washington users due to sanctions by regulatory authorities. The exchange lost its operating license, forcing it to halt services and cease operations in Washington starting August 20th.
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Washington became the latest U.S. state to withdraw the exchange’s license and operation permits. This is the eighth time the exchange has suffered under tight regulatory oversight in the U.S. jurisdiction. Other states suspended, revoked, or failed to renew Binance’ permits and working licenses after former CEO Changpeng Zhao, alias CZ, pleaded guilty to violating anti-money laundering regulations.
Hello, due to regulatory developments in Washington, https://t.co/AZwoBOgsqS will suspend operations for Washington customers and close all accounts based in the state on or after August 20, 2024.
— Binance.US 🇺🇸 (@BinanceUS) June 26, 2024
Binance.US was established in 2019 as a subsidiary of Binance.com, and its operations are independent of those of its parent company. However, the two companies share operating software, branding, and logos. U.S. regulators have accused the exchange of commingling funds with Binance.com, especially after the 4 months prison term metted out to CZ.
North Dakota revokes Binance.US’s money transmitter license
In June, North Dakota revoked the exchange’s money transmitter license, forcing Binance.US to permanently suspend fiat and crypto-related transactions for North Dakota clients. The state also cited the exchange’s lack of transparency and poor cooperation with authorities. Oregon followed suit and suspended the exchange’s money transmitter licenses.
Binance.US has also suspended the onboarding of new users in Georgia, Connecticut, Minnesota, and Ohio. The exchange have had its licenses revoked in New York, Texas, Vermont, and Hawaii.
U.S. SEC and India’s FIU crackdown on Binance.US
The recent regulatory developments by individual states like Washington follow a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance, the parent company of Binance.US.
The SEC accused Binance.US of failing to comply with registration protocols as an exchange, a digital asset brokerage, and a clearing agency. The U.S. SEC also highlighted the exchange’s inadequate protocols meant to curb wash trading, manipulative trading, and money laundering. The SEC attempted to freeze Binance.US’s assets in June, but a judge rebuffed the claims.
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India also put the exchange in the spotlight on June 21 after imposing a hefty fine for facilitating digital asset services in violation of the jurisdiction’s anti-money laundering regulations. India’s Financial Intelligence Unit (FIU) hit the crypto exchange with a $2.25 million fine, which is approximately 188.2 million rupees.
The Indian regulator highlighted that Binance’s poor anti-money laundering protocols could be overridden, and criminals could ultimately finance terrorism. The FIU had also banned Binance’s operations for 4 months and imposed an additional $2 million penalty in January for failing to register with the FIU and comply with all Indian laws.
Cryptopolitan reporting by Collins J. Okoth