After reaching a $4.3 billion settlement with the US Department of Justice, Binance and its founder, Zhao Changpeng (CZ), continue to provide services to US customers through Binance.US but face greater regulatory challenges. Recently, the regulatory authorities of Florida and Alaska have notified Binance.US that the platform cannot provide services to their residents.
Binance and its founder, Zhao Changpeng (CZ), reached a record-breaking $4.3 billion settlement with the US Department of Justice at the end of November last year. Binance.com can no longer allow US customers to use its platform, but its local business, Binance.US, can still continue to provide services to US customers. However, this institution is facing increasing pressure from US regulatory agencies.
According to The Wall Street Journal, regulatory authorities in Florida and Alaska have notified Binance.US that the cryptocurrency exchange cannot provide services to their residents. In January of this year, the Alaska Department of Banking and Securities refused to renew Binance.US’ license, while the Florida Office of Financial Regulation issued an emergency cease and desist order for Binance.US’ money transfers shortly after CZ’s guilty plea.
After reaching a settlement with the US Department of Justice last year, CZ, the founder of Binance, admitted violating the Bank Secrecy Act in a federal court in Seattle and resigned from his position as CEO. This included stepping down 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 states such as Arkansas, Illinois, and South Dakota. However, regulatory authorities in these states have requested that CZ not regain his voting rights in Binance.US.
CZ’s sentencing hearing is scheduled for February 23 this year, and he could face 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 and be granted permission to recuperate in Abu Dhabi. However, according to court records, Judge Jones rejected his request during a closed-door hearing.
Prior to this request, US prosecutors, in late November last year, argued that CZ had a risk of flight based on the following four reasons and asked the judge to restrict CZ from leaving the US until the sentencing result was announced:
1. CZ’s wealth: As a billionaire, CZ possesses a substantial amount of wealth that may be beyond the reach of US authorities.
2. Residence status: CZ resides in the United Arab Emirates, a country that does not have an extradition treaty with the US.
3. Family factors: He has a family in the UAE, and if he returns, he may choose to stay there and avoid facing US imprisonment.
4. Attitude towards sentencing: Although CZ voluntarily pleaded guilty, there is still a significant possibility that he may choose not to return to the US to face 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
– Post-CZ Era: What Changes Will Binance and the Cryptocurrency Market Face?
– Binance’s $4.3 Billion Settlement Ranks Second in the Top 15 US Cryptocurrency Enforcement Actions.