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Binance and CEO Gearing Up to Reject US Regulator Lawsuit

Binance and CEO Changpeng Zhao are preparing to counter a lawsuit by US regulators, intending to file a motion to dismiss the accusations.

Wed, 26 Jul 2023, 04:52 am UTC

Binance, the popular cryptocurrency exchange, alongside its CEO, Changpeng “CZ” Zhao, is reportedly preparing to challenge a lawsuit from the US commodities regulator. Binance and Zhao aim to submit a court motion to dismiss the pending legal action.

A recent document submitted to an Illinois District Court on July 24 revealed that multiple entities of Binance, Zhao, and the former Chief Compliance Officer, Samuel Lim, have expressed their intentions to file two distinct motions seeking dismissal of the complaint. One joint motion will be filed by the foreign Binance entities along with Zhao, while Lim intends to submit his motion separately, joining portions of the other motion.

Interestingly, Binance has asked the court to allow them to exceed the standard 15-page limit for the brief that would support their motion. They have requested permission to extend the brief to up to 50 pages, a move justified by the intricate nature of the lawsuit brought against them by the Commodity Futures Trading Commission (CFTC) in March.

The commodities regulator initiated the lawsuit against Binance and Zhao, accusing the cryptocurrency exchange of not duly registering with the regulatory authority. They alleged that despite barring US residents from conducting transactions on its platform, Binance knowingly engaged in cryptocurrency transactions with US-based individuals since 2019, consciously breaching US laws.

CFTC referred to Binance's compliance process as a "sham" and suggested that it deliberately carried out its operations outside of the US, disguising its headquarters' location to sidestep US regulations. Binance and Zhao also faced a lawsuit from the Securities and Exchange Commission (SEC) on June 5. The SEC claimed that Binance sold unregistered securities, allowed US customers on its global platform, and accused Zhao of misappropriating customer funds.

Furthermore, Binance reportedly faces an investigation by the US Department of Justice on allegations of providing platform access to Russians, potentially breaching US sanctions.

Binance is fortifying its legal defenses and preparing to take the offensive in the ongoing legal battles, as it fights for its right to continue operations amid rising regulatory scrutiny.

TokenPost | [email protected]

TokenPost | [email protected]

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