July 25, 2023 at 11:32 GMTModified date: July 25, 2023 at 11:32 GMT
July 25, 2023 at 11:32 GMT

Binance to file motion to dismiss CFTC complaint

Binance has declared its intention to take action against the Commodity Futures Trading Commission’s (CFTC) complaint by filing a motion for its dismissal.

Binance. Source: Shutterstock

Binance has firmly declared its intention to take action against the Commodity Futures Trading Commission’s (CFTC) complaint by filing a motion for its dismissal. 

This information was shared via an unopposed motion filed yesterday by Binance, seeking permission to exceed the page limit for its Memoranda of Law.

An excerpt reads: “Defendants’ response to the Complaint is due on July 27, 2023. (ECF No. 35.) The Foreign Binance Entities and Zhao intend to file a joint Motion to Dismiss the Complaint.”.

Ahead of its official response on 27 July, the defendants intend to file a joint motion, with Samuel Lim filing a separate motion and joining parts of the motion filed by the other defendants. They anticipate that due to the complexity of the complaint and the arguments they need to present, their memoranda may exceed the standard 15-page limit.

The derivative market regulator had accused Binance, Changpeng Zhao and Lim of engaging in various unlawful activities, including soliciting and accepting orders from US customers for digital asset spot and derivative transactions involving commodities. They also alleged that Binance targeted the US market and generated significant revenue from it despite claiming to restrict U.S. customers’ access.

As a result, the watchdog sought injunctions, civil monetary penalties, and other remedies to enforce compliance with the Act and restrain Binance’s alleged unlawful practices.

Binance continues to fend off SEC attack

The United States Securities and Exchange Commission (SEC) is also hot on the heels of Binance. It filed 13 charges pertaining to violations of securities law against Binance Holdings Ltd, BAM Trading Services Inc. and their founder Changpeng Zhao last month. 

The regulator alleged that Binance misled US customers and provided them access to Binance[.]com along with other violations of securities laws that endangered US investors. Binance strongly refuted these accusations, asserting that they were unfounded and emphasised the safety and security of all user assets on Binance and its affiliated platforms. Binance further questioned the SEC’s motives and accused the regulator of seeking media attention rather than protecting investors as it claimed.

A few days later, the SEC filed a motion requesting the court to freeze all assets belonging to Binance US citing reasons of “safety of customer assets” and to “prevent the dissipation of available assets for any judgment, given the Defendants’ years of violative conduct, disregard of the laws of the United States and evasion of regulatory oversight”. The court dismissed the SEC’s motion, requesting that both parties reach a common ground regarding customer fund safety.

As the regulatory battle intensifies, Binance and other companies facing similar lawsuits now fancy their chances of a favourable judgment following Ripple’s recent victory against the SEC.