Binance and CEO Seeking to File Motion to Dismiss CFTC Complaint
Binance, the world’s largest crypto exchange by daily trading volume, has announced plans to file a motion to dismiss a lawsuit submitted by the Commodity Futures Trading Commission (CFTC). The announcement by Binance and the chief executive Changpeng “CZ” Zhao issued on Monday, July 24, revealed that the crypto exchange will file two motions against CFTC seeking to dismiss the case.
A submission at the Illinois District Court, the Binance team led by the CEO and former compliance officer Samuel Lim agreed to submitt the proposed motions before July 27. In their report, Zhao will team up with other Binance entities to file a motion to dismiss the CFTC lawsuit. At the same time, the former chief compliance officer will file a separate motion against the complaint.
Binance to Dismiss CFTC Complaint
In March, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and the CEO for contravening the Commodities Exchange Act. The CFTC accused Binance of violating federal laws by failing to register with the market regulators.
In their filing, the CFTC observed that Binance had restricted US customers from transacting on the trading platform. Besides the restriction embraced by Binance to uphold compliance, the CFTC observed that from 2019 the controversial crypto exchange supported multiple transactions for US customers, which was illegal.
After closely examining Binance’s operation, the CFTC labeled the compliance approach adopted by the crypto exchange as a “sham.” The regulators noted that Binance established its core duties outside America and failed to conceal the location of its head office to bypass US regulations.
Reflecting on the Monday report, the Binance team referred to the CFTC lawsuit as complex. This prompted the crypto exchange to seek the court to allow Binance to provide a synthesized report of the supporting document. Also, Binance requested an extension of pages from 15 to 50.
In their argument, the Binance team plans to incorporate some element of the Memoranda of law in their two motions. Also, the Binance team plans to integrate several arguments to back up their evidence when drafting the motions.
Binance Charged for Violating US Regulations
Besides the CFTC lawsuit, the Binance team has been caught on the wrong side of the law by the Securities and Exchange Commission (SEC). On June 5, the SEC charged Binance and the CEO for violating the securities laws.
The SEC claimed that Binance offered unregistered securities. The trouble crypto exchange was also charged for supporting the customers to evade the US regulation. The Binance CEO was accused of misappropriating customers’ funds.
Moreover, the US Department of Justice (DOJ) has launched an investigation against Binance after the crypto exchange allegedly violated the US sanctions. The DOJ claimed that Binance supported the Russians to trade on their platform which was against the sanction imposed by the US .
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