Binance, CEO Changpeng Zhao intends to seek dismissal of CFTC complaint

General

Crypto exchange Binance and its CEO Changpeng “CZ” Zhao are planning to file a motion to dismiss a March-filed lawsuit from the United States commodities regulator.

In a July 24 filing to an Illinois District Court, multiple Binance entities, Zhao and former chief compliance officer Samuel Lim said they plan to file two separate motions to dismiss the complaint before July 27.

“The Foreign Binance Entities and Zhao intend to file a joint Motion to Dismiss the Complaint. Lim intends to file a separate Motion to Dismiss the Complaint, and join parts of the motion filed by the Foreign Binance Entities and Zhao,” the filing read.

Binance is also seeking permission to exceed a 15-page limit on the brief which would be used to support its motion and requested for it to go up to 50 pages citing the complexity of the lawsuit brought against it.

An excerpt from Binance’s filing requesting an increase on the 15 page limit. Source: CourtListener

“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.”

The Commodity Futures Trading Commission (CFTC) sued Binance and Zhao in March alleging the crypto exchange did not properly register with the regulator.

The CFTC claimed despite Binance blocking U.S. residents from transacting on its platform, since at least 2019 it knowingly conducted transactions in multiple cryptocurrencies for people based in the U.S. and intentionally violated U.S. laws.

The regulator also called Binance’s compliance process a “sham” and alleged it willingly conducted its activities outside of the U.S. and obscured the location of its headquarters with the aim of evading U.S. regulations.

The Securities and Exchange Commission (SEC) also sued Binance and Zhao on June 5 alleging it sold unregistered securities, allowed U.S. customers to use its global platform and claimed Zhao misused customer funds.

The SEC’s complaint claimed Binance’s compliance chief in 2018 — believed to be Lim — said in a message to another compliance officer that “we are operating as a fking unlicensed securities exchange in the USA bro”

Binance is also reportedly under investigation by the U.S. Department of Justice for allowing Russians to use its platform in violation of U.S. sanctions.

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