Binance has submitted a new motion to dismiss the lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC) against it. The leading cryptocurrency exchange urges the court to reject the agency’s attempt to expand its territorial reach beyond the United States.
Binance Accuses CFTC of Using U.S. Lawsuit as a ‘Trojan Horse’ to Gain Global Regulatory Reach
The world’s largest digital assets exchange, Binance, has again tried to convince a U.S. court to dismiss the lawsuit in which America’s derivatives markets regulator alleged earlier this year that the crypto company had violated U.S. trading and derivatives rules.
The CFTC sued Binance and its CEO Changpeng Zhao (CZ) in March, claiming that at least since July 2019, the exchange had offered and executed commodity derivatives transactions on behalf of U.S. persons. Binance sought to dismiss the complaint in July which the Commission disputed in September.
In its latest filing, the crypto giant argues that the regulator’s response brief “confirms that the agency’s overreaching theories of its jurisdiction are unfounded,” accusing the CTFC of seeking to regulate foreign individuals and corporations that reside and operate outside the United States and ignoring the limits of the U.S. Commodity Exchange Act. Binance’s lawyers insisted:
Congress did not make the CFTC the world’s derivatives police, and the Court should reject the agency’s effort to expand its territorial reach beyond what is permitted by the law.
The crypto company pointed out that the CFTC has added new and broad arguments that would allow it to regulate any activity in cryptocurrency or other assets related to a derivatives product anywhere on the planet and that it has invented a new definition of a “U.S. person.”
“The Court should reject the CFTC’s effort to use its attack on the non-U.S. Defendants in this case as a Trojan horse in order to achieve worldwide regulatory reach—which would have consequences far beyond this case and not intended by Congress,” Binance warned. The exchange called for the lawsuit’s dismissal citing multiple reasons, including “impermissibly extraterritorial” claims.
has been under heightened regulatory pressure this year. In early June, entities operating the crypto trading platform and CZ were also sued by the Securities and Exchange Commission (SEC) for allegedly breaking U.S. securities laws. Binance is also reportedly being investigated by the U.S. Justice Department for suspected sanctions violations.
Do you think the U.S. court will accept Binance’s arguments to dismiss the CFTC’s lawsuit? Share your expectations in the comments section below.
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