The First District Court of Appeals in Florida has nullified an Emergency Suspension Order (ESO) issued by the Office of Financial Regulation against Binance.US, according to a court filing on May 22.
Earlier this year, Florida’s regulator banned Binance.US from serving its residents, citing “immediate danger” to the public as the reason for its decision. The regulator also pointed to Changpeng Zhao’s legal issues, as the founder and former CEO of Binance Holdings pleaded guilty to federal finance charges.
However, Binance.US argued that the suspension order contained procedural errors and misinterpreted local laws. The exchange also warned that suspending its license would lead to significant financial losses for over 170,000 accounts in Florida and highlighted the potential harm from the forced liquidation of customers’ digital assets.
In the ruling, the judges unanimously sided with Binance.US, noting that the Florida Office of Financial Regulation failed to justify that the process for arriving at its decision was fair under the circumstances.
The court further highlighted the possible financial harm from suspending the license and the potential damage to customers from forced liquidation. They wrote:
“A forced and untimely sale of Florida customers’ digital assets threatens financial harm because of digital asset price fluctuations. In addition, an account holder who is forced to sell a digital asset at a price higher than a cost basis would incur unplanned and extensive tax liabilities.”
Conclusively, the judges noted that the ESO failed to discuss alternative remedies or explain why less harsh measures would be insufficient to address the alleged emergency.
Binance.US is the US affiliate of Binance, the largest crypto trading platform by trading platform. The platform has slowly been rebuilding its customer base following the extensive regulatory scrutiny that collapsed its market share last year.
In April, the firm appointed Martin C. Grant, a former New York Federal Reserve Bank Compliance Chief, to its Board to improve compliance efforts and restore users’ trust in its services.
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