Breaking: Binance’s License Suspension in Florida Overturned By Court
Highlights
- Court rules in favor of Binance.US regarding an Emergency Suspension Order by Florida Office of Financial Regulation.
- The ESO contains a material error in procedure and an erroneous interpretation of Florida Statutes.
- The order on grounds of plea deals with Binance Holdings and Changpeng Zhao is insufficient.
- Binance and Binance.US face several challenges in the United States.
The world’s largest crypto exchange Binance’s subsidiary Binance.US has won an appeal against the Emergency Suspension Order (ESO) by Florida state regulator, as per a ruling by the Florida First District Court of Appeal on Wednesday.
Court Rules in Favor of Binance.US
The First District Court of Appeal for the State of Florida ruled on May 22 that plea deals involving Changpeng Zhao and Binance Holdings for not complying with Anti-Money Laundering (AML) and Bank Secrecy Act are not enough to block Binance.US from operating in the state.
The court said that the Florida Office of Financial Regulation (OFR) never backed up a conclusion of law that Zhao’s conduct constituted grounds for suspending the license of the company’s Florida affiliate Binance.US because Zhao’s conduct allegedly “constituted an immediate danger to the public health, safety, and welfare necessitating an emergency suspension.”
On Nov 29, 2023, OFR issued an emergency suspension order (ESO) to suspend the money-services business license of Binance.US and directed the exchange to cease and desist from engaging in money transmission activity.
“The ESO contains a material error in procedure and an erroneous interpretation of sections 560.114(2) and 120.60(6), Florida Statutes,” as per the court analysis of the order. The ESO has also failed to discuss alternative remedies rather than suspension of the license as it threatens significant financial losses.
Also Read: Binance Delists Major Cryptos, Brace For Price Impact
Binance Faces Challenges in the US
Binance’s subsidiary Binance.US saw a severe drop in trading volumes amid a number of challenges including money transmitter license suspension and heightened scrutiny from regulators.
The Binance vs SEC lawsuit is in the discovery and deposition phase, with parties resolving disputes related to an earlier consent order by the court.
Recently, a significant development has emerged in favor of Binance as it leverages key details in the United States v. Eisenberg lawsuit to negate the U.S. SEC’s position on stablecoins that BUSD and USDC are unregistered securities. An exhibit in the US DOJ filing states that USDC stablecoin is not a security as it doesn’t pass the Howey test.
“But there is no factual basis for treating USDC as a security or putting that question to the jury. A core component of a security is that the holders of the security “expect profits” from the efforts of others,” as per DOJ filing.
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