- Binance, in a motion to dismiss, declares the U.S. Commodity Futures Trading Commission (CFTC) is overstepping its jurisdiction by attempting to sue the global exchange.
- Binance’s stance is that the CFTC’s charges do not meet the legal standards set out by statutory requirements and are not applicable to the platform’s foreign conduct.
Binance Refutes CFTC’s Claims of Jurisdiction
Binance, a leading crypto exchange on the global stage, has taken a stance against the U.S. Commodity Futures Trading Commission’s (CFTC) lawsuit alleging it offered illegal commodities trading products to U.S. residents. In a motion to dismiss, the exchange posits that the CFTC is breaching its jurisdictional boundaries.
In the filing, Binance ardently emphasizes that the regulator is overstepping its authority by suing the exchange, which operates outside of U.S. boundaries, and its CEO, Changpeng “CZ” Zhao, a non-U.S. resident. The document asserts that the initial six charges brought forth by the CFTC
“do not apply to the foreign conduct alleged here.”
Furthermore, the exchange alleges that a majority of these charges don’t satisfy the legal prerequisites set by statutory requirements.
Binance’s motion for dismissal further highlights that the seventh charge – the accusation that Binance seeks to circumvent the Commodity Exchange Act – ought to be rejected, as the CFTC falls short in meeting its stipulated requisites.
The filing emphatically states,
“There is no dispute that the CFTC has no regulatory authority over spot trading even in the United States, let alone abroad.”
The motion thus posits that the CFTC’s allegation raises the question of whether, when Binance began offering supplementary products in or after 2019, it fell under the registration and regulatory compliance provisions of the Commodity Exchange Act and CFTC regulations.
The CFTC initially launched its lawsuit against Binance in March, alleging that the platform provided unregistered derivatives products within the U.S., which included cryptocurrency trading services and futures and options products. The regulator also claimed that Binance failed to adequately supervise its operations, establish a proper know-your-customer or anti-money laundering program, and didn’t register as a futures commissions merchant, designated contract market, or swap execution facility.
In addition to the CFTC’s lawsuit, Binance faces additional legal hurdles in the U.S., including a lawsuit filed last month by the Securities and Exchange Commission (SEC).