per filing by Binance’s CEO CFTC is overreacting and should drop all the charges against its company. Binance and its CEO Changpeng Zhao have filed a motion to dismiss a complaint against the cryptocurrency exchange by the U.S. Commodity Futures Trading Commission (CFTC), the company said in a court filing on Thursday.
The CFTC sued Binance, CEO Zhao and former Chief Compliance Officer Samuel Lim in March, alleging they violated the Commodity Exchange Act and certain related federal regulations. CFTC charges Binance for operating what the regulator said was an “illegal” exchange and a “sham” compliance program.
What Binance CEO wants of CFTC
The filing leans heavily on the view that the CFTC is overreaching in suing Binance, which does not operate in the U.S., and it’s CEO Changpeng “CZ” Zhao, who does not reside in the U.S., the filing said. The first six of the CFTC’s charges “do not apply to the foreign conduct alleged here,” and several of the charges don’t meet the legal standards set out by statutory requirements, it added.
As per the world’s largest cryptocurrency exchange Binance’s CEO CFTC’s case should be dismissed because it sought to regulate foreign individuals and corporations that reside and operate outside the U.S.
The cryptocurrency exchange Binance also quoted a 2007 ruling that stated: “United States law governs domestically but does not rule the world.”
The holding company of Binance is based in the Cayman Islands, while CEO Zhao is a Canadian citizen.
CFTC Binance complaint
The complaint of CFTC for Binance is that from at least July 2019, cryptocurrency exchange Binance “offered and executed commodity derivatives transactions on behalf of U.S. persons” in violation of U.S. laws.
In its reply, Binance CEO told CFTC that by June 2019, Binance.com had begun implementing steps to restrict and off-board potential U.S. users and ensure that new users were not U.S. persons.
“Importantly, Binance.com did not begin to offer the alleged digital asset derivative products until July 2019 and later after it began to restrict and off-board potential U.S. users,” Binance CEO said to CFTC.
CFTC charges Binance which it wanted to be dismissed. Lim filed a separate motion to dismiss the CFTC claims against him.
Cryptocurrency exchange Binance, which is responsible for the oversight of commodities and derivatives markets, including for Bitcoin, did not immediately respond to a request for comment on the filing.
Trouble with SEC
Binance and Zhao also sued by the U.S. Securities and Exchange Commission (SEC) in June for allegedly operating a “web of deception,” listing 13 charges against Binance, Zhao and the operator of its purportedly independent U.S. exchange.
Legal battles of cryptocurrency exchange Binance
In March, the CFTC sued Binance and Zhao for allegedly breaking derivatives rules and unregistered trading activities in the U.S. The agency said in its complaint that Binance had “taken a calculated, phased approach to increase its United States presence despite publicly stating its purported intent to ‘block’ or ‘restrict’ customers located in the United States from accessing its platform.”
CFTC charges Binance and it called the lawsuit “unexpected and disappointing,” claiming CFTC and Binance has been working collaboratively for more than two years.
The SEC also sued the exchange and Zhao last month for allegedly violating securities laws.
Stock update
BNB, the native token of Binance, fell about 2% as of 9:08 a.m. in Singapore on Tuesday to trade at around $238. BNB has shed some 2.5% this year, compared with a gain of 45% in a gauge of the biggest 100 tokens. The success of BNB and Binance are often seen as intertwined.
