Binance prepares to show its teeth in a legal dispute with the US regulators.
Binance, a major cryptocurrency exchange, and its CEO Changpeng "CZ" Zhao are gearing up to challenge a lawsuit from the United States commodities regulator.
In a filing submitted to an Illinois District Court on July 24th, various Binance divisions, Zhao, and ex-Chief Compliance Officer Samuel Lim have outlined plans to lodge two distinct motions for the dismissal of the lawsuit before July 27th.
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Each motion will be filed separately by Zhao and the Foreign Binance Entities, with Lim intending to add parts of his motion to theirs. The official filing notes:
The Foreign Binance Entities 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 Foreign Binance Entities and Zhao.
Moreover, Binance has applied for permission to expand the length of its supporting brief from the standard 15 pages to 50 pages. The company argues that the extensive nature of the Commodity Futures Trading Commission's (CFTC) March lawsuit against them requires a more detailed response.
In March, the CFTC accused Binance and its CEO Changpeng Zhao of not registering appropriately with the agency. It claimed that even though Binance barred US residents from using its platform, the crypto exchange continued to knowingly transact with US-based individuals in several cryptocurrencies since at least 2019.
The CFTC further alleged that Binance's compliance process was a "sham." It accused the crypto exchange of conducting its operations outside the US to evade US regulations and hiding the location of its headquarters for the same purpose.
The Securities and Exchange Commission (SEC) also sued Binance and Zhao on June 5th, accusing them of selling unregistered securities and enabling US customers to use its global platform. They also alleged Zhao had misused customer funds.
The SEC further stated that in 2018, a person thought to be Lim messaged another compliance officer, saying:
We are operating as a f*king unlicensed securities exchange in the USA bro.
The attempts to dismiss the CFTC lawsuit mark a critical point in the relationship between cryptocurrency entities and regulators, with the outcome of this case having significant implications for the future of cryptocurrency regulation.
