Justin Sullivan
A state appeals court in Florida overturned an emergency license suspension of Binance in the state on Wednesday, saying that the Office of Financial Regulation (“OFR”) didn’t follow proper procedure in suspending the cryptocurrency exchange.
In November 2023, Florida’s OFR issued the emergency suspension order (“ESO”) on review after Binance Holdings and its founder, Changpeng Zhao, entered plea agreements for failing to implement anti-money laundering and Bank Secrecy Act compliance programs. As part of the plea deal, Zhao stepped down from his executive roles at the company and relinquished his voting rights.
At the time, the OFR cited an immediate serious danger to the public health, safety, and welfare when a person listed on a licensee’s application for a money services business license is criminally charged with or arrested for a crime.
A judge in the First District Court of Appeal in the State of Florida said the ESO contained a material error in procedure and incorrectly interpreted two sections of Florida statutes.
The ESO didn’t state the specific reasons for concluding that the procedures it used were fair under the circumstances, the opinion said. And the court points out that the law says the state “may” suspend the license.
“Additional reasoning beyond mere reference to the statute is necessary to suspend the license, given the property interest at stake here and potential harm discussed below,” according to the opinion.
Also, the ESO failed to discuss alternative remedies or why less-harsh remedies would be insufficient to address the purported emergency.
