Binance Files Intent For Dismissal Of CFTC Complaint

Binance Files Intent For Dismissal Of CFTC Complaint

This year in March, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance.

Now, the largest crypto exchange in the world is planning on asking the court to dismiss the lawsuit in question.

The filing

Samuel Lin, the former Chief Compliance Officer, chief executive Changpeng Zhao, and multiple entities submitted a filing recently in the Illinois District Court.

In the said filing, they had outlined their intention of filing two individual motions that would be aimed at requesting the dismissal of the complaint filed by the CFTC recently.

The filing dictated that the Foreign Binance Entities as well as the CEO were planning on filing a joint motion for the complaint’s dismissal.

Meanwhile, a separate motion would be filed by Lim for the same purpose and it would join some parts of the motion filed by Zhao and the entities.

July 27th is the deadline established for filing the said motions for the complaint’s dismissal. In fact, Binance has also asked for permission to exceed the standard limit on the brief, which is 15 pages.

The said brief would be used by the crypto exchange for supporting the motions for the complaint’s dismissal.

The details

Binance is asking for permission to submit a brief that would be 50 pages long, as it said that CFTC’s complaint was complex.

Therefore, they would have to move a greater number of arguments for supporting their motions for its dismissal.

While the argument of the defendants was not specified in the filing, it is possible that the motions for dismissal could challenge the validity and basis of the allegations made by the CFTC against Zhao, Lim, and Binance.

There was no comment from the CFTC regarding the matter.

Regulatory pressure

As mentioned earlier, the CFTC filed the lawsuit in March this year and has accused the crypto exchange of violating federal regulations, in addition to the Commodities Exchange Act.

According to the CFTC, since July 2019, Binance has facilitated transactions involving commodity derivatives in the United States on behalf of individuals.

As per the regulator, this is in direct violation of the country’s laws. Furthermore, it has also asserted that the crypto exchange has not supervised activity adequately on its platform.

Another accusation made against Binance is the ineffective use of know-your-customer (KYC) and anti-money laundering (AML) controls.

The crypto exchange has also allegedly traded against its own clients and helped clients in the US evade regulators and did the same itself.

A spokesperson for Binance responded to these accusations and said that it was disappointing and unexpected to discover the CFTC’s complaint.

The company stated that they had been collaborating with the regulator for two years, due to which it had been so unexpected.

Apart from this lawsuit, the Securities and Exchange Commission (SEC) has also filed one against Binance and its US subsidiary.

The lawsuit has accused the platform and its CEO of commingling customer funds. The Department of Justice (DOJ) has also been investigating the crypto exchange for sanctions violations and money laundering.