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Binance.US Gets Green Light After Florida Court Case Win: Will Other US States Follow?

Last Updated May 23, 2024 11:02 AM
Teuta Franjkovic
Last Updated May 23, 2024 11:02 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • A Florida court overturned the emergency suspension of Binance.US’s license, allowing it to resume operations.
  • The court criticized regulators for not justifying the suspension and highlighted the financial risks it posed to customers.
  • This marks a significant legal victory for Binance.US amid ongoing regulatory challenges in other states.

A state appeals court ruled  on Wednesday that Florida regulators improperly blocked Binance from operating in the state. This means the the cryptocurrency exchange can resume operations there.

Despite a recent legal victory in Florida, Binance.US continues to face regulatory hurdles elsewhere. For instance, license suspensions or non-renewals persist in states like North Carolina and Alaska. Binance.US does not offer services  to residents of nine US states. New user onboarding has stopped in some states, including Georgia and Washington, although existing customers there can still access Binance.US services.

Changpeng Zhao’s four-month sentence could lead US states to re-evaluate their decisions to revoke or suspend Binance.US’s operating licenses.

Binance.US Operated Despite License Suspension in Florida

The unanimous decision by the court  on May 22 overturned the emergency suspension order issued by Florida financial regulators. The court said the authorities failed to justify their decision to block the company from doing business.

In November, Florida regulators took action  against Binance.US by suspending its money transmitter license. This move occurred one week after Binance founder Changpeng Zhao pleaded guilty to violating US anti-money laundering laws.

Despite these challenges and the broader scrutiny of the global Binance exchange by the US government, the company’s local affiliate maintained its operations within the country.

On November 28, Binance.US said : “We remain fully operational and are committed to continuing to serve our customers with the same products and services as we always have.”

Binance.US responded to Florida’s emergency suspension of its money transmitter license by challenging the state’s regulators. It argued the order was fraught with errors, misinterpreted local laws, and would cause significant financial harm.

Additionally, the court said  the emergency suspension of Binance.US placed around 170,000 customers at risk of loss. The suspension, enacted in late 2023, came after the main Binance exchange agreed to a $4.3 billion settlement with the US Department of Justice.

Binance.US did not immediately respond to a request for comment.

Legal Victory in Florida Amidst Regulatory Hurdles in Multiple States

According to the official website , Binance.US services are currently unavailable to residents of:

  • Alaska
  • American Samoa.
  • Hawaii
  • Maine.
  • New York.
  • Northern Mariana Islands.
  • Texas.
  • US Virgin Islands
  • Vermont.

Additionally, new user onboarding is temporarily paused in:

  • Connecticut
  • Florida.
  • Georgia.
  • Guam.
  • North Carolina.
  • Ohio.
  • Oregon
  • Minnesota
  • Washington.

However, existing customers in these states and territories may continue to use Binance.US services.

Meanwhile, the Oregon Division of Financial Regulation has recently revoked  Binance.US money transmission license. This bans the company from accepting, holding, or selling fiat or crypto funds for consumers in the state.

However, the successful appeal in Florida marks Binance’s first significant regulatory win in the United States, providing a positive shift in what has been a series of regulatory setbacks over the years.

Overturning Emergency License Suspension

The judges of the appeals court unanimously agreed  with Binance.US. They sais the Florida Office of Financial Regulation had not adequately justified that their decision-making process was fair under the circumstances.

The court emphasized the financial danger posed by a compelled and untimely sale of digital assets due to price fluctuations. It also  pointed out the potential for substantial unplanned tax liabilities for account holders forced to sell digital assets at prices higher than their cost basis.

Ultimately, the judges criticized  the November 2023 Emergency Suspension Order (ESO) for not considering alternative remedies and failing to explain why less severe measures wouldn’t suffice to address the purported emergency.

Changpeng Zhao’s relatively lenient four-month sentence states that have previously revoked or suspended Binance.US’s operating licenses. Seeing Florida’s recent decision to overturn the suspension could potentially influence other states to reevaluate their stances.

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