In a bold move to combat regulatory scrutiny, Binance, the leading cryptocurrency exchange, and its charismatic CEO, Changpeng “CZ” Zhao, have announced their intention to seek dismissal of a lawsuit filed against them by the United States Commodity Futures Trading Commission (CFTC).
According to a recent filing submitted to an Illinois District Court on July 24, multiple entities affiliated with Binance, along with Zhao and former Chief Compliance Officer Samuel Lim, are gearing up to file two separate motions to dismiss the CFTC’s complaint. The defendants plan to present a joint Motion to Dismiss, while Lim seeks to file his own separate Motion, while joining parts of the arguments raised by Binance entities and Zhao.
One of the key requests made by Binance in their filings is to exceed the standard 15-page limit for supporting briefs, citing the complexity of the CFTC’s lawsuit against them. The exchange has sought permission to submit a more extensive 50-page brief, as they anticipate presenting multiple arguments to support their dismissal motion.
The CFTC filed the lawsuit against Binance and its CEO in March, alleging that the crypto exchange failed to properly register with the regulatory body. Despite Binance implementing measures to block U.S. residents from trading on its platform, the CFTC accused the exchange of knowingly facilitating transactions involving various cryptocurrencies for individuals based in the United States. The regulator contends that Binance intentionally violated U.S. laws and conducted its operations outside of the country, while concealing the true location of its headquarters to evade U.S. regulations.
In addition to the CFTC lawsuit, Binance is also embroiled in legal disputes with the Securities and Exchange Commission (SEC). The SEC filed a lawsuit on June 5, alleging that Binance sold unregistered securities and allowed U.S. customers to use its global platform, with allegations of Changpeng Zhao misusing customer funds.
Expanding on the SEC’s complaint, it was revealed that the exchange’s former Chief Compliance Officer, presumed to be Samuel Lim, had purportedly referred to their operations in the U.S. as an “unlicensed securities exchange” in internal communications.
The challenges for Binance do not end there, as the U.S. Department of Justice has reportedly launched an investigation into the exchange for allegedly enabling Russian users to utilize its platform in violation of U.S. sanctions.
As the legal battle intensifies, Binance and CZ find themselves facing multiple regulatory hurdles. The outcome of their motions to dismiss will be keenly watched by the cryptocurrency community, as it could have far-reaching implications for the industry’s future within the United States. Only time will tell how this high-stakes clash between the crypto giant and regulatory authorities will unfold.
