Binance and CEO Changpeng Zhao Plan to File a Motion to Dismiss CFTC Lawsuit
Binance, the world’s largest cryptocurrency exchange, billionaire founder Changpeng Zhao (CZ) and the exchange’s former head of compliance Samuel Lim intended to file two motions to dismiss a complaint from the Commodity Futures Trading Commission (CFTC).
for court file Monday, Binance and its parties’ response to the CFTC lawsuit is due on July 27.
On March 27, the CFTC filed a complaint against the crypto exchange and its founder CZ, for offering unregistered crypto derivatives products in the US, thereby violating the law.
The CFTC accused Binance of operating an “illegal” exchange and a “sham” compliance program. The regulator sued Binance, CZ, and Lim for “willful evasion” of US law, “while engaging in a calculated strategy of regulatory arbitrage for their trading benefit.”
That said, Monday’s filing noted that the “foreign entities of Binance and Zhao intend to file a joint motion to dismiss the complaint.”
“Lim intends to file a separate Motion to Dismiss the Complaint and join parts of the motion filed by the Binance and Zhao Foreign Entities.”
Binance has also sought to extend a 15-page limit on the brief that would support motions to dismiss, although in accordance with the local rule page limit, support for opposition to any motion “should not exceed 15 pages without prior court approval.”
Binance faces pressure from multiple regulators
The US Securities and Exchange Commission (SEC) also sued the exchange and founder Zhao with 13 counts, for “blatant disregard of federal securities laws.”
According to a Binance spokesperson, the SEC charges came after “extensive cooperation and recent good faith negotiations.” The source said,
“Despite our efforts at productive engagement, the SEC abandoned us and denied us due process, and instead unilaterally chose to litigate.”
Additionally, the cryptocurrency exchange denied SEC allegations that its native currency BNB and BUSD are securities.
After this, the founder CZ tweeted the number ‘4’, which implies disagreement with something. “Our entire team is ready to ensure that the systems are stable, including withdrawals and deposits. We will issue a response once we see the complaint,” he said at the time.