- Binance.US faces closures in Washington due to lost licenses, part of a broader US trend in crypto regulation.
- Regulatory challenges include money laundering charges against the former CEO, impacting operations nationwide.
- SEC lawsuit accuses Binance.US of trading violations and fund commingling with its global parent company.
Binance.US, the American arm of the global cryptocurrency exchange, will cease operations in Washington state on August 20, 2024, following the loss of its operating license amid heightened regulatory scrutiny.
Washington’s ruling marks the eighth time that Binance.US has faced regulatory obstacles in the United States. The exchange’s licenses have been revoked, suspended, or denied renewal by multiple states in response to former CEO Changpeng Zhao’s conviction in money laundering.
In June, North Dakota revoked Binance.US’s money transmitter license, preventing the exchange from conducting fiat and crypto transactions for North Dakota clients. Oregon followed suit in May, citing the exchange’s lack of transparency and cooperation with authorities. Additionally, Florida suspended Binance.US’s license in November, soon after Zhao’s alleged wrongdoing, while Alaska declined to renew its license in January.
Binance.US has also stopped onboarding new users in Georgia, Connecticut, Minnesota, and Ohio. The exchange is unable to operate in New York, Texas, Vermont, and Hawaii due to similar regulatory actions.
The Washington State Department of Financial Institutions advises users with any questions or concerns to reach out. This suspension in Washington aligns with a broader trend of regulatory tightening that Binance.US faces across various U.S. jurisdictions.
Despite operating separately from its global parent, Binance.com, Binance.US shares software, branding, and logos with the parent company. The U.S. SEC had filed a lawsuit against Binance.US in June 2023, accusing the company of failing to register as a clearinghouse, broker, and exchange. The SEC also cited alleged money commingling with Binance.com, participation in wash trading, and a lack of safeguards over manipulative trading.
Zhao remains a major stakeholder, although there is ongoing disagreement over his influence over the business. The regulatory challenges faced by Binance.US underscore the increasing scrutiny of cryptocurrency exchanges in the U.S.
The SEC’s lawsuit, along with actions by individual states, highlights the ongoing debate over how to balance innovation in the crypto sector with investor protection and regulatory compliance. It remains to be seen whether the company can successfully address these challenges and regain its footing in the American market.
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