By Hassan Mehmood (Saudi Arabia)
Binance has raised questions over the implied international jurisdiction of commodities regulators in the USA. The firm is currently embroiled in a lawsuit against the Commodity and Futures Trading Commission.
On this account, Binance officials recently claimed in the court that CFTC does not have international jurisdiction over virtual asset services providers. Furthermore, the defendants retained that BinanceUS is a separate entity from its global wing.
CFTC’s Legal Jurisdiction
Binance lawyers submitted the assertion in a new court filing this week. The filing intimates that the CFTC is overreaching its legal jurisdiction in regard to international virtual currency operations.
CFTC brought an unregistered crypto derivatives lawsuit against Binance in March. CFTC is the main regulator in the USA that supervises the derivative market such as futures, forwards, and option contracts, etc. The case is currently in session at a court in Illinois.
Binance filed a new filing in the court during the latest proceeding round earlier this week. The firm recorded its protest against the CFTC and retained that the legal jurisdiction of the derivatives regulator is limited to US states. Binance lawyers have told media that CFTC officials cannot regulate trading activities taking place outside of legal area.
Also read:Additionally, Binance lawyers were also critical of broad scope of arguments brought by the regulator against the firm and retained that it was not an international police for derivatives.
CFTC Cannot Regulate Binance’s Global Operations
At the same time, Binance officials told the court of law that the operations taking place in Binance.US are a separate entity from its international operations. The firm retained that CFTC officials may only bring objections against the operational activities that are taking place within US borders.
It is worth noting that Binance is also facing a series of lawsuits from another US regulator namely Securities and Exchange Commission (SEC). SEC has also accused Binance of breaking the Securities Act and dealing in unregistered securities.
Binance to Face Regulatory Challenges in Many Countries
Jonathan Farenell, the head of operations at Binance UK and former Bitfinity CEO left the cryptocurrency trading platform in September. He was said to have working on bringing more regulatory compliance for the virtual currency company.
His exit from Binance coincided with the introduction of stringent regulations from the Financial Conduct Authority (FCA). FCA is changing the regulatory framework for cryptocurrency firms in the region guided by the Travel Rule requirements of FATF.
Binance has announced that it will not register new consumers from the UK anymore. Meanwhile, Bloomberg article indicated that Stephanie Cabossioras the general manager of Binance France left their post last week on account of ongoing regulatory issues.
Financial regulators in France have asserted that Binance is involved in the illicit issuance of cryptocurrencies. On the same account, other top executives at the firm such as CSO Patrick Hillman, SVP Steven Christie, and others have left the firm from various national branches.
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