Key Takeaways
- Binance to file two separate motions to dismiss the CFTC’s complaint before the deadline of July 27.
- The exchange sought approval for a 50-page brief to thoroughly support its motion against the CFTC’s March lawsuit
In the latest development of the ongoing legal battles faced by crypto exchange Binance, the company’s CEO, Changpeng Zhao, along with several Binance entities and former Chief Compliance Officer Samuel Lim, are set to file motions to dismiss a lawsuit brought forth by the United States Commodities Futures Trading Commission (CFTC). The move comes as Binance continues to grapple with regulatory challenges from multiple fronts.
In a filing submitted to an Illinois District Court on July 24, Binance disclosed its intention to file two separate motions to dismiss the CFTC’s complaint before the deadline of July 27. The filing did not provide specific details about Binance’s arguments but cited the complexity of the case as a reason for requesting permission to exceed the standard 15-page limit for its response.
The exchange sought approval for a 50-page brief to thoroughly support its motion against the CFTC’s March lawsuit, which alleges that Binance failed to comply with regulatory requirements by not properly registering with the derivatives regulator.
The CFTC initiated its investigation into Binance in 2021, focusing on potential violations of regulatory obligations. According to the suit filed in March 2023, the exchange obscured critical information such as the location of its executive offices and the identities and locations of the entities operating the trading platform, further complicating the regulatory inquiry.
CFTC has accused Binance of acting as a designated contract market or swap execution facility based on its role in facilitating derivatives transactions without registering with the CFTC,
Binance’s legal challenges don’t end there. The Securities and Exchange Commission (SEC) has also sued the exchange, adding to the company’s woes. The SEC specifically sought a temporary restraining order to freeze all funds held in Binance.US, the American subsidiary of the cryptocurrency exchange.
SEC had alleged that Binance artificially inflated its trading volumes, diverted customer funds, failed to restrict U.S. customers from its platform and misled investors about its market surveillance controls.
