2023-7-25 12:04 |
Coinspeaker
Binance and Its CEO to Seek Dismissal of CFTC Lawsuit
Renowned crypto exchange Binance and its CEO Changpeng ‘CZ’ Zhao, have announced intentions to file a motion to dismiss a lawsuit brought against it by the United States Commodity Futures Trading Commission (CFTC).
In a recent filing submitted to an Illinois District Court, Binance and Zhao, and former Chief Compliance Officer Samuel Lim announced their intention to file two separate motions to dismiss the CFTC’s complaint before July 27.
The CFTC’s Complaint filed in March outlines a litany of allegations against Binance and its key executives. It accuses the crypto exchange of facilitating illegal crypto derivatives trading activities within the United States. According to the CFTC, Binance allowed US residents to access and trade crypto derivatives without proper registration, which contravenes the regulatory requirements set forth by the Commodity Exchange Act.
With the deadline for their response to the complaint approaching on July 27, 2023, the defendants are formulating their defense strategies. Accordingly, the Foreign Binance Entities and CZ, who are named in the action, there’s a plan to file a combined motion to dismiss the CFTC’s Complaint.
In contrast, Lim is prepared to file a second motion to dismiss the complaint. However, Lim also plans to align certain aspects of his motion with the arguments presented in the motion filed by the Foreign Binance Entities and Zhao. This suggests that the defendants may work together on certain aspects of their defense.
Additionally, Binance requested the court’s permission to exceed the standard 15-page limit for its brief, which will be utilized to support the exchange’s motion to dismiss the CFTC’s lawsuit. Binance argues that the complexity of the CFTC’s lawsuit warrants a more extensive submission of up to 50 pages to adequately present its defense.
Binance’s Ongoing Lawsuits with US RegulatorsThe legal troubles continue to mount for Binance, as the Securities and Exchange Commission (SEC) also filed a lawsuit against the exchange and CZ in June. The SEC’s complaint spans a range of serious allegations against Binance and its CEO.
The regulatory body claims that Binance sold unregistered securities, a violation of securities regulations. Also, the SEC claims that Binance permitted US clients to access and use its worldwide platform despite not being authorized to do so. This accusation aligns with the CFTC’s lawsuit, which also contended that Binance permitted US residents to engage in prohibited activities on its platform.
Furthermore, the SEC accuses CZ of misusing customer funds, although specific details about the alleged misuse have not been disclosed yet. This allegation, if proven, could have significant consequences for the exchange and the CEO, potentially resulting in legal penalties and possibly reputational damage.
Meanwhile, Binance is grappling with yet another legal challenge as the US Department of Justice (DOJ) reportedly launches an investigation. The investigation is centered around allegations that Binance allowed Russian nationals to use its platform, which could be in violation of US sanctions.next
Binance and Its CEO to Seek Dismissal of CFTC Lawsuit
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