Binance Holdings and its founder and CEO Changpeng Zhao (CZ) intend to file motions to try to have the court dismiss the Commodity Futures Trading Commission (CFTC) charges against the company. Binance, CZ and the exchange’s former compliance officer Samuel Lim face multiple charges, including illegally operating a digital asset derivatives exchange in the US.
According to details of the lawsuit filed by Binance on Monday (24), in addition to the motion, Lim also intends to dismiss the lawsuit. The document did not, however, specify Binance’s argument:
“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 merge parts of the motion filed by Binance and Zhao Foreign Entities,” the document reads.
Binance, CZ and Lim, have until July 27th to submit their responses to the CFTC complaint. The trio also requested an expansion of the page limit of their law memorandums, due to “the complexity of the CFTC Complaint and the number of arguments Defendants anticipate.”
CFTC vs Binance
As reported by CriptoFácil, in March of this year the CFTC sued the exchange and CZ for allegedly violating derivatives rules and carrying out unregistered commercial activities in the US.
In the lawsuit, the CFTC alleged that Binance operated a derivatives trading operation in the US, offering trading for cryptocurrencies. The exchange allowed Bitcoin (BTC), Ether (ETH), Litecoin (LTC), USDT, and Binance USD (BUSD) derivatives trading.
Furthermore, the lawsuit alleged that exchange users concealed or falsified their location through VPNs. The objective would be to make it difficult to identify a supposed headquarters.
In response, Binance called the CFTC’s decision “unexpected and disappointing”:
“The complaint filed by the CFTC is unexpected and disappointing as we have worked collaboratively with the CFTC for over two years. However, we intend to continue to collaborate with regulators in the US and around the world,” said the spokesperson.
The US Securities and Exchange Commission (SEC) also sued the exchange and CZ in June for allegedly violating the country’s securities laws. The SEC has even asked for a temporary restraining order on all funds deposited on Binance.US – the US arm of the company.
However, the restraining order was never implemented. That’s because Binance.US and the SEC entered into an agreement to place the branch’s assets and servers under the control of its US-based staff only.