Violet Vallaya
North Dakota has become the latest state to revoke the money transmitter license of Binance.US, further escalating regulatory scrutiny of the popular cryptocurrency exchange, according to an announcement by the North Dakota Department of Financial Institutions (DFI), adding to the growing list of states taking action against Binance.US.
DFI Commissioner Lise Kruse cited non-compliance with state money transmitter laws as the primary reason for the revocation. The order specifically mentions that Binance.US, operated by BAM Trading Services Inc., is failing to meet these requirements. Additionally, the order references the November 2023 federal conviction of Binance and its founder, Changpeng Zhao, for conspiracy to operate as an unlicensed money transmitter and deficiencies in their anti-money laundering (AML) program.
Binance.US can request a reversal of the order within 30 days until July 17. If no request is made by that date, the revocation will become effective.
The revocation comes just weeks after several other states took similar actions. Alaska, Florida, Maine, North Carolina, and Oregon have revoked or denied renewals for the crypto trading platform’s money transmitter licenses in recent months. Notably, Florida was the first to act in November 2023, shortly after Zhao’s guilty plea. Binance.US also faces challenges in states like New York, Texas, Vermont, and Hawaii, where they never received licenses in the first place.
The regulatory crackdown on Binance.US stems from concerns regarding its compliance with financial regulations and AML practices. The federal charges against Binance alleged the exchange facilitated millions of dollars in illegal transactions without proper security protocols.
While Binance.US claims to be a separate entity from its global counterpart, regulators remain skeptical. They point to shared branding, similar trading platforms, and the involvement of Zhao in both entities as evidence of a closer connection. This skepticism fuels worries that regulatory shortcomings on the global platform could spill over to the U.S. arm.
The revocation of the money transmitter license in North Dakota specifically affects the exchange’s ability to operate as a money service business (MSB) in the state. This means users in North Dakota will no longer be able to use Binance.US to transfer fiat currency (USD) to buy or sell cryptocurrencies.
The actions against Binance.US reflect a broader trend of increased regulatory scrutiny in the cryptocurrency space. As the crypto market matures, governments are grappling with how to balance innovation with consumer protection and financial stability.
