Binance files motion to dismiss CFTC lawsuit
The cryptocurrency exchange Binance and its chief executive Changpeng Zhao have filed a motion to dismiss the existing CFTC complaint in federal court in Chicago.
On 27 March 2023 the regulator accused the trading platform of violating derivatives trading rules and operating without a licence. The agency also asserts that the company was aware that its customers include sanctioned individuals.
According to the statement, Binance’s former chief compliance officer Samuel Lim also intends to file a motion to dismiss the complaint.
Currently Binance, Zhao and Lim must submit their responses to the CFTC’s complaint by 27 July. They asked to increase the number of pages in their memoranda, “in light of the complexity of the claims and the number of arguments the defendants expect to present in support of their motions to dismiss”.
Binance, Lim and Zhao filed a response as part of the motion to dismiss the CFTC’s suit, which alleges that the Commission exceeded its authority by suing the exchange.
The document states that the case targets foreign individuals and entities who reside and operate outside the United States, and that some of the regulator’s accusations do not meet legal standards.
«The cornerstone of our rule of law is that, as a rule, \\\”the laws of the United States operate within the country, but do not govern the world\\\”. … The CFTC resorts to a muddle of legal theories that rely on competing and contradictory registration categories, advances new and unfounded claims under a regulatory regime that has never before been used, and relies on assertions that have no bearing on the case under the agency’s own leadership. The court should reject the CFTC’s attempt to regulate the situation through coercive enforcement», the document states.
In the CFTC claimed, that Binance intentionally violated the rules. In response to the allegations Zhao noted that the regulator’s claims contain “incomplete account of facts” and his company does not agree with many of the points’ characterisations. Going forward he condemned “coercive crypto-regulation” by regulators.
On 5 June SEC filed suit against Binance and Zhao. The agency brought 13 charges, including the sale of unregistered securities. On 6 June the regulator filed a motion to freeze the exchange’s US-domiciled assets.
On 9 June users of Binance.US lost the ability to deposit dollars, prompting selling by those looking to withdraw their funds in fiat. In light of this, the exchange saw a discount in the Bitcoin quotes against the US dollar — the figure reached about $2,200 (7.3%).
Earlier, on 17 June the SEC and Binance reached an agreement regarding client funds in the United States. The exchange resumed the withdrawal of assets, though the company warned that the situation could change.
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