Lawyers representing the crypto exchange and its CEO claimed the CFTC was attempting to act as the “world’s derivatives police” in its lawsuit.
Lawyers representing Binance and CEO Changpeng “CZ” Zhao have filed statements in support of a motion to dismiss a lawsuit filed by the United States Commodity Futures Trading Commission (CFTC) in March.
In an Oct. 23 filing in U.S. District Court for the Northern District of Illinois, CZ’s and Binance’s attorneys made several legal claims arguing for the dismissal of the CFTC’s case against the crypto exchange. According to the legal teams, the regulator’s arguments, if accepted by the court, “would allow it to regulate any activity in cryptocurrency […] related to a derivatives product” across the globe.
“Congress did not make the CFTC the world’s derivatives police, and the Court should reject the agency’s effort to expand its territorial reach beyond what is permitted by the law,” said the filing.
Binance’s and CZ’s lawyers also went after each of the individual counts brought by the CFTC, arguing the regulator was “pursuing a novel theory” in an anti-evasion claim and failed to meet the standards for others. The attorneys called on the court to “dismiss the Complaint with prejudice”.
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The CFTC lawsuit, first filed in March, alleged Binance failed to register with the regulator in violation of rules on derivatives trading. According to the CFTC, CZ was aware that Binance had solicited customers based in the United States, requiring the exchange to be in compliance with regulatory requirements.
Binance lawyers made a similar filing in July for dismissing the case, arguing at the time that the CFTC exceeded its regulatory authority. The crypto exchange also faces a lawsuit from the U.S. Securities and Exchange Commission filed in June.
