Binance.US, the American arm of the global cryptocurrency exchange, has secured a significant win in its legal battle against the suspension of its money-services business license in Florida.
The Florida First District Court of Appeal ruled that the emergency suspension order issued by the state Office of Financial Regulation (OFR) lacked legal justification.
Legal Justification Questioned
The court’s decision hinged on the interpretation of state law, which stipulates that the OFR “may” suspend a money-services business license “by any procedure that is fair under the circumstances.” The court found that the OFR failed to provide adequate reasoning for the suspension and did not explore less severe alternatives.
According to the court, the use of “may” in the statute implies discretion, not obligation, necessitating additional reasoning for license suspension.
Threat of Financial Losses
Moreover, the court highlighted the potential harm posed to over 170,000 state account holders by the license suspension. Liquidating digital asset holdings to comply with the suspension order could expose users to significant financial losses due to price fluctuations in the cryptocurrency market.
The decision of the appeals court is subject to further appeal. But it marks a significant development in Binance.US’s legal battle against regulatory actions.
Ongoing Legal Challenges
The suspension of Binance.US’s Florida license came in the aftermath of Binance CEO Changpeng Zhao’s guilty plea to charges of violating U.S. Anti-Money Laundering law. Florida was the first of several states to take action against Binance.US. Other states like Alaska, Maine, North Carolina, and Oregon also suspending activity or denying license renewals.
While Binance.US’s legal victory in Florida is a positive development, its status remains uncertain in other states, with ongoing regulatory challenges in Georgia and Ohio.
The Florida OFR did not respond immediately to requests for comment on the case. Binance.US has temporarily paused new user onboarding in Florida while navigating the legal proceedings.
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