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North Dakota Joins List of US States Banning Binance’s Operations

Shalini Nagarajan
Last updated: | 1 min read
Binance US

North Dakota’s financial regulatory authority has joined other US states in withdrawing Binance.US’ money transmission license.

It is now the seventh state in the country to do so, following Alaska, Florida, Maine, North Carolina, and Oregon. Despite the broader Binance exchange facing regulatory scrutiny from the US government, its domestic affiliate continued to operate within the country.

The state issued an order this week stating that the US subsidiary did not adhere to North Dakota regulations. It also referenced Changpeng Zhao, the subsidiary’s majority beneficial owner, pleading guilty to charges related to US anti-money laundering law violations.

Binance.US did not return Cryptonews’ request for comment by press time.

Prosecutors Target Binance for Alleged Security Lapses and Criminal Ties

Zhao is presently serving a four-month prison term in the US as he pleaded guilty to money laundering offenses last year. Despite his incarceration, he continues to be Binance’s primary shareholder.

The crackdown comes after Binance was slammed for operating with lax security measures, making it a haven for criminals. Prosecutors alleged this lack of oversight allowed several suspicious transactions to slip through the cracks. This potentially involved designated terrorist groups, according to the prosecutors.

They also alleged that the exchange failed to report transactions relating to child sexual abuse materials. It also allegedly received a significant share of ransomware profits. As part of a settlement, Binance agreed to a $4.32b penalty. Zhao personally paid a $50m criminal fine and an additional $50m to the US Commodity Futures Trading Commission.

Florida Appeals Court Overturns Block on Binance US Operations

According to the North Dakota regulator, Binance.US neglected to uphold adequate permissible investments and an effective anti-money laundering program, thereby violating the Money Transmitters Act. The regulator asserted that revoking the license was necessary and justified in safeguarding citizens from unlawful activities, practices, or transactions.

In May, a state appeals court determined that Florida regulators had acted unjustly in its decision to block Binance from operating within the state. The court found that the regulators did not provide sufficient justification for their action against the company.