Amid the increasing troubles for Binance, the exchange has decided to get back at the regulator. The exchange is planning to reach out the court in reference to its lawsuit from the Commodity Futures Trading Commission (CFTC) and request the dismissal.
According to recent reports, crypto exchange Binance and its CEO Changpeng Zhao (CZ), are planning to file motion requesting the court to dismiss the CFTC lawsuit. With this motion in picture, the industry has been reminded of the regulatory struggles surrounding the exchange at the moment.
In the filings from Monday in Illinois District Court, multiple Binance entities, Zhao and former Chief Compliance Officer Samuel Lim said that before July 27 they plan to file two separate motions to dismiss the complaint. The filling reads:
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.
Reportedly, in its filling Binance is also seeking permission to exceed a 15-page limit on the brief to support its motion. The exchange requested for the brief to go up to 50 pages, citing the complexity of the CFTC’s March lawsuit against it. The filling stated:
Given the complexity of the CFTC’s Complaint and the number of arguments Defendants anticipate making in support of their Motions to Dismiss, Defendants anticipate that their Memoranda of Law in support of the two motions will exceed the fifteen-page limits.
As reported by Todayq News in March, the CFTC sued Binance and its CEO Changpeng Zhao alleging the crypto exchange did not properly register with the regulator. The regulator claimed that despite Binance blocking U.S. residents from transacting on its platform, since at least 2019 it intentionally conducted transactions in multiple cryptocurrencies for people based in the U.S. and intentionally violated U.S. laws.
The regulator also called Binance’s compliance process a “sham” and alleged it willingly conducted its activities outside of the U.S. and obscured the location of its headquarters with the aim of evading U.S. regulations.
Following this, on June 5, the Securities and Exchange Commission (SEC) alleged that Binance and its CEO, Changpeng Zhao, intentionally evaded laws and operated an illegal exchange. In its 136-page document, the SEC accused the exchange of operating without a license and offering unregistered securities. It also claimed that Binance and CEO Changpeng Zhao (CZ) commingled users’ funds.
Following this, the SEC filed an emergency motion in the court to put a restraining order to the exchange’s assets. While the motion didn’t pass through citing the jeopardy to users’ funds, the act triggered the investors and ended in huge outflows. As reported by Todayq News, the outflows during the period was significantly larger than that of Coinbase, another exchange hit by the lawsuit.
Additionally, the delisting of trading pairs and halting of USD services triggered the investors to run for their funds. As the regulatory wave spread to other jurisdictions, troubles kept on increasing. While Binance is trying to put up a good fight, the exchange has come under the speculation after the SEC listed the internal chats between employees as an evidence. Some of the top executives were mocking the compliance standards of the exchange and called it an unlicensed exchange.
Simultaneously, the US DoJ is also investigating the exchange for money laundering concerns and violating economic sanctions on Russia. On top of it, amid the global crackdown, various countries have risen against the exchange including Brazil, Netherlands, France, Austria, Cyprus, and Germany.