Binance.US has scored a vital win following a court ruling that Florida regulators had failed to follow proper procedures for blocking the crypto exchange. Per the 8-page document, the First District Court has quashed an Emergency Suspension Order [ESO] issued by the State of Florida’s Office of Financial Regulation [OFR] against BAM Trading Services, Inc., which operates as Binance.US.
Following federal plea agreements involving Changpeng Zhao, the former CEO of Binance Holdings Limited, OFR, suspended the exchange’s US-affiliated Binance.US license, including ceasing all money transmission activities. While handing out the ban, the regulator cited Zhao’s criminal charges and his role as a “Controlling Shareholder” and indirect owner of Binance.US. It also claimed that Zhao’s actions were an immediate danger to public health, safety, and welfare, justifying the emergency suspension.
However, the court determined that the emergency suspension order was a drastic measure and not adequately justified. According to Section 120.60(6), the authorities were required to provide specific reasons explaining why their actions were fair and necessary. The court also noted that the law provides the choice (discretion) to suspend a license, which is not a requirement. Since the OFR did not offer adequate justification for their decision or consider less drastic alternatives to address the problem, the court determined that the ESO was flawed and required further review.
Binance.US: Procedural Fairness In Regulatory Measures
Furthermore, the court also considered the regulator’s disregard for the potential impact of its decision on the 170,000 Binance.US account holders in Florida. These individuals could face enforced liquidation of their digital assets, leading to significant financial losses caused by market changes and unexpected tax obligations. The new development is crucial for Binance.US as the court’s ruling ensures that the platform can continue its operations while adhering to necessary regulatory compliance.
Furthermore, this ruling highlights the significance of thorough procedural fairness in regulatory measures, particularly in the swiftly changing financial realm of digital assets and cryptocurrencies. It is hoped that this decision could establish a guideline for regulators to refrain from hastily imposing unjustified bans solely due to the involvement of disputing parties in a legal conflict.