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23/05/24
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Court of Appeal Says Suspension of Binance.US License in Florida Unjustifiable
The Florida First District Court of Appeal has ruled against a decision by Florida’s Office of Financial Regulation (OFR) to suspend Binance.US’s money-services business license. According to the court, OFR does not have legal justification to issue an emergency suspension order.
The OFR suspended the cryptocurrency exchange’s license in response to the former CEO of Binance Changpeng Zhao’s guilty plea to charges related to the violation of the United States Anti-Money Laundering law about six months ago.
The court’s ruling was based on Florida law regarding the suspension of a money-services business license. According to the law, the suspension may come “by any procedure that is fair under the circumstances” but the OFR is expected to provide reasons to prove the fairness of the decision.
Likewise, the OFR failed to discuss less harsh alternatives to suspension. “The usage of ‘may’ in the statute [cited by the OFR] implies discretion, rather than obligation. Additional reasoning beyond mere reference to the statute is necessary to suspend the license,” according to the court.
By suspending the crypto exchange’s license, the court found that it is a threat to over 170,000 account holders in the state, as they are at risk of significant financial losses and tax liabilities.
“For Petitioner to immediately comply with the ESO, it would be necessary to liquidate the digital asset holdings of every customer [which] threatens financial harm because of digital asset price fluctuations,” said the court.
However, the OFR may appeal the court’s ruling. Agencies in other states, including Alaska, Maine, North Carolina, and Oregon also took similar action against the cryptocurrency exchange.
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