Binance, the global crypto exchange, is challenging the U.S. Commodity Futures Trading Commission’s (CFTC) jurisdiction in a motion to dismiss the regulator’s lawsuit against it. According to the filing, the CFTC is overreaching in suing Binance, which does not operate in the U.S., and its CEO Changpeng CZ Zhao, who does not reside in the U.S. The motion to dismiss argued that there is no dispute that the CFTC has no regulatory authority over spot trading even in the United States, let alone abroad.
The CFTC sued Binance in March, alleging the company offered unregistered derivatives products in the U.S., including cryptocurrency trading services and futures and options products. Binance’s motion to dismiss argued that the first six of the CFTC’s charges do not apply to the foreign conduct alleged here, and several of the charges don’t meet the legal standards set out by statutory requirements. The seventh charge – that Binance is trying to evade the Commodity Exchange Act – should also be dismissed because the agency likewise does not meet the requirements it needs, the filing said.
Despite 236 paragraphs of allegations – which followed a multi-year investigation in which defendants provided extensive information voluntarily – the CFTC’s complaint fails at the outset, the motion to dismiss said.