COLUMBUS, Ohio (WCMH) -- The biggest cryptocurrency exchange in the world has warned customers in Ohio it is pulling the plug, and they have less than a week to get their funds out before recovering them becomes more complicated.
The shutdown is coming as a result of action by the Ohio Division of Financial Institutions under the state department of commerce. Tom Brockman, deputy chief communications officer for the Ohio Department of Commerce, confirmed the agency informed Binance on March 20 that it intended to revoke the cryptocurrency exchange's money transmission license. Binance responded by deciding to voluntarily wind down operations over the coming months.
"It’s important for impacted consumers to know this is a legitimate action, and they should remove their funds from the Binance platform," Brockman wrote to NBC4.
Ohio joined a growing handful of states to pull Binance's license to operate in their respective region. The exchange sent out notices July 12 to its Ohio customer base, and asked them to withdraw any Bitcoin, Ethereum or other cryptocurrency they had to another address. Binance also blocked any users who already had zero balances, according to the ODOC.
Binance specified that it would completely halt trading for all customers in Ohio 60 days after the emailed notice, meaning the cutoff is Tuesday. On social media, the exchange's users posted some of the emails they received regarding the shutdown.
"We encourage you to prepare for the wind down process by reviewing your balances and withdrawing all funds from your Binance.US account before September 10, 2024. After this date, any remaining balance left in your account may require Binance.US to begin the due diligence process of escheatment," the exchange wrote in part.
Escheatment, in this case, means Binance will mark a user's assets as unclaimed or abandoned, and transfer them to the state government where they last resided. For local customers, their cryptocurrency and any other money stored with Binance would go to the Ohio Division of Unclaimed Funds. From there, customers would have to provide specific documents to the state to show proof of ownership before they can reclaim their assets.
While the funds will still be available in some way after Binance's shutdown in Ohio, the exchange also warned users that the state could require it to convert all cryptocurrency balances to U.S. dollars before ODUF takes them. This could mean a person ultimately gets more or less money for an asset like Bitcoin, depending on its value the day it was changed. Binance noted the technical sales could also be taxable events under laws for capital gains.
Binance also clarified that its existing customers could keep using the platform if they have moved out of Ohio. They would be eligible in any state except the following others:
Binance is recovering from a tumultuous 2023, where the U.S. Securities and Exchange Commission accused it and CEO Changpeng Zhao of misusing investor funds and violating multiple laws. Zhao ultimately stepped down, and Binance agreed to pay a roughly $4 billion settlement in November as a result.
