North Dakota has now joined the growing list of US states that are banning Binance’s operations, as its financial regulatory authority has withdrawn Binance.US’s money transmission license. This 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 from the US government, Binance’s domestic affiliate had continued to operate in the country.
The state issued an order this week citing that the US subsidiary failed to comply with North Dakota regulations. The order also mentioned Changpeng Zhao, who is the majority beneficial owner of the subsidiary, pleading guilty to charges related to violations of US anti-money laundering laws. Binance.US did not respond to Cryptonews’ request for comment at the time of press.
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 made it attractive to criminal elements. Prosecutors claimed that this lack of oversight allowed suspicious transactions, potentially involving terrorist groups, to go unnoticed. Additionally, they accused the exchange of not reporting transactions related to child sexual abuse materials and profiting from ransomware activities. As part of a settlement, Binance agreed to pay 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 failed to maintain adequate permissible investments and an effective anti-money laundering program, thereby violating the Money Transmitters Act. The regulator justified the revocation of the license as necessary to protect citizens from illegal activities, practices, or transactions.
In a related development, a state appeals court in Florida overturned a decision by regulators to block Binance from operating within the state, citing insufficient justification for their actions against the company.