Binance Executives Seek Dismissal of CFTC Complaint

Binance Executives Seek Dismissal of CFTC Complaint

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Changpeng Zhao and other defendants associated with the Binance crypto exchange plan to appeal to the court to dismiss a lawsuit from the United States commodities regulator.

Binance’s Appeal To Dismiss

Binance CEO Changpeng Zhao (CZ) and its former Chief Compliance Officer Samuel Lim have revealed that they will be filing motions with the court seeking permission to dismiss a prior complaint by the Commodity Futures Trading Commission (CFTC). 

In the July 24 filing to the Illinois District Court, the defendants, which consist of multiple entities from the Binance ecosystem, have claimed that they will be filing two separate motions to counter the CFTC’s complaint and appeal for its dismissal. 

The CFTC's lawsuit against Binance was filed on March 27, 2023, and the defendants are required to respond latest by July 27, 2023. In its latest filing, the Foreign Binance Entities, which includes CZ, has revealed intentions to file a joint Motion to Dismiss, while Samuel Lim plans to file a separate motion and incorporate parts of the motion filed by the other defendants.

Binance Seeks To Exceed Page Limit Rule

The defendants are also seeking to exceed the 15-page limit rule on the brief as they claim that they made every effort to adhere to this limit but contend that due to the intricacy of the CFTC's complaint and the multiple arguments they wish to present, their Memoranda of Law is likely to surpass the given page restriction.

The filing reads,

“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.”

In their motion, the defendants requested the court's permission to collectively use up to 50 pages for both Memoranda of Law. This proposed limit is 25 pages less than what the defendants would be entitled to under Local Rule 7.1 if each of them separately moved to dismiss the CFTC's complaint. 

CFTC’s Complaint

Notably, the CFTC has agreed not to oppose this request, as confirmed by discussions between both parties' counsels. While the court has yet to issue a ruling on their motion, the cooperation from the CFTC's counsel indicates a willingness to accommodate the defendants' request.

The regulatory body had accused Binance and Zhao of violating derivatives regulations and engaging in unregistered trading activities in the United States. The complaint alleged that Binance had strategically expanded its US presence despite publicly claiming to block or restrict access for US customers. CZ responded to the lawsuit, expressing surprise and disappointment, stating that it had been actively cooperating with the agency for over two years.

As the July 27 deadline for the response approaches, market participants are keenly observing the developments in this case, as its outcome may have significant implications for the cryptocurrency industry.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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