After mulling the idea for a while, leading cryptocurrency exchange Binance together with its Chief Executive Officer (CEO) Changpeng ‘CZ’ Zhao has requested that a federal judge dismiss the charges brought against them by the Commodity Futures Trading Commission (CFTC).
In the motion which was filed on Thursday, July 27th, Binance, CZ and the exchange’s former Chief Compliance Officer Samuel Lim made their arguments on the basis that CFTC is overreaching as it did not have the jurisdiction for such lawsuit.
CFTC Lawsuit is Impermissibly Extraterritorial
The defendants claim that the United States regulator is currently relying on inconsistent theories and is therefore, making unsound claims and irrelevant allegations. Also, the motion explained that the lawsuit is “impermissibly extraterritorial” seeing that the company is not based in the U.S. Based on the filing,
“In this case, the CFTC seeks to regulate foreign individuals and corporations that reside and operate outside the United States — outstripping the limits of its statutory authority and treading on deep-rooted principles of comity with foreign sovereigns.”
Also, a 17-page motion in support of Lim’s request to dismiss read, “What little the complaint says about Mr. Lim relates to things he is supposed to have done or failed to do abroad. None of those allegations make the necessary link between Mr. Lim, this country, and this case.”
CFTC Charge Binance For Violating U.S. Laws
The CFTC brought charges against Binance, CZ and Samuel Lim in March to stop their illegal conduct and behaviors and to force them to comply with the law. Binance was charged for operating unregistered commodity trading in the United States. In addition, the top exchange allegedly violated U.S. law by failing to supervise the exchange’s operations as well as helping U.S. customers circumvent the platform’s compliance control.
CFTC Chair Rostin Behnam mentioned that Binance intentionally broke the U.S. laws. “These are not unsophisticated individuals. They are starting large companies and offering futures contracts and derivatives to US customers,” he added.
SEC Sues Binance For Listing Unregistered Securities
Apart from this lawsuit with CFTC, Binance is also a target for the Securities and Exchange Commission (SEC).
On Monday, June 5th, the SEC indicted Binance for listing unregistered securities. Some of the coins that was listed in the lawsuit are SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, NEXO, ATOM, ALGO, and COTI.