Highlights:
- Binance.US faces regulatory hurdles leading to the suspension of operations in Washington state.
- The exchange’s compliance issues highlight broader regulatory concerns within the cryptocurrency sector.
- Users in Washington state must transition their accounts ahead of the August 20 deadline.
Binance.US, the American arm of the global cryptocurrency exchange, has announced its decision to cease operations in Washington state effective August 20, 2024. This move comes in response to regulatory challenges and the expiration of its operating license.
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The decision to withdraw from Washington state follows a series of regulatory setbacks for Binance.US across the United States. Recently, the exchange faced license revocations in several states, including North Dakota and Oregon, citing regulatory scrutiny and compliance issues.
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
Besides Washington, Binance.US has encountered similar regulatory hurdles in Alaska, American Samoa, Hawaii, Maine, New York, Oregon, Texas, Vermont, Guam, Northern Mariana Islands, and the U.S. Virgin Islands. These challenges highlight the complex regulatory environment faced by cryptocurrency exchanges operating in the U.S.
Earlier this year, North Dakota’s financial regulator revoked Binance.US’s money transmitter license, followed by Oregon’s decision in May. These actions have been justified to protect consumers and ensure compliance with state financial laws.
SEC Involvement and Legal Challenges
The U.S. Securities and Exchange Commission (SEC) has been particularly vigilant in monitoring Binance.US, raising significant concerns about the security of customer assets. Allegations include potential access by Binance Holdings Limited employees to funds stored on Amazon Web Services servers.
Although Binance.US insists on its compliance with all regulatory demands and the adequacy of its response to the SEC, concerns persist about the oversight and control of customer assets.
The SEC’s investigation, initiated in June 2023, specifically targets whether Binance.US maintains full custody of customer assets and adheres to stringent security measures. These regulatory challenges are compounded by the involvement of Changpeng “CZ” Zhao. Despite stepping down as CEO, Zhao remains a significant figure within Binance.US as a majority shareholder, raising further questions about the exchange’s governance and operational independence.
Response to Regulatory Actions
Binance.US has emphasized its commitment to compliance in response to the escalating regulatory scrutiny. The exchange asserts that it has provided all necessary documentation to the authorities and meets, if not exceeds, the legal requirements set forth by regulatory bodies. Despite these efforts, the wave of license revocations and ongoing legal challenges underscore Binance.US’s precarious position in the U.S. regulatory landscape.
As the deadline for halting operations in Washington approaches, customers are advised to close their accounts and withdraw any funds. The Washington State Department of Financial Institutions remains available to address any concerns from the users affected by this transition.
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