Binance and CZ Move to Dismiss CFTC’s Lawsuit: Here’s Why

Updated on 25. July 2023 By admin Leave a comment

  • Binance and CZ File Motion to Dismiss CFTC’s Lawsuit: On March 27, 2023, the Commodity Futures Trading Commission took legal action against Binance for violating the Commodity Exchange Act and offering futures trades without registering as a futures commission merchant (FCM). Binance, its CEO Changpeng Zhao (CZ), and the company’s former compliance chief Samuel Lim seek to dismiss the complaint filed by the US CFTC.
  • US SEC Sues Binance & CZ: Last month, the US Securities and Exchange Commission (SEC) sued Binance and CZ for violating the country’s securities law while Australian authorities invaded the exchange’s local offices. Furthermore, French newspaper Le Monde reported that Binance France is under investigation for alleged money laundering while failing to live up to its know-your-customer (KYC) procedures.
  • Defendants Request Court Allowance: The defendants requested the court to allow them to respond with a 50-page motion while currently limited to only 15 pages. Per the document, the defendants’ response against the CFTC needs to be submitted by July 27.

Background of Lawsuit Against Binance

On March 27th 2023, The Commodity Futures Trading Commission took legal action against crypto exchange platform Binance for violating The Commodity Exchange Act and offering futures trades without registering as a futures commission merchant (FCM).

Defendants’ Response Against CFTC Complaint

Binance’s CEO Changpeng Zhao (CZ), along with former compliance chief Samuel Lim have decided to file a joint motion alongside an individual motion in order to seek dismissal of CFTC’s complaint. They’ve requested allowance from court in order to respond with 50 page motion instead of current limitation of 15 pages. According Article’s documents response should be submitted before July 27th.

Previous Investigation Against Binance

Apart from this lawsuit US Securities and Exchanges Commission had previously taken legal action against Binance & CZ for allegedly violating securities law. Additionally Australian Authorities had raided it’s local office in order investigate it’s derivatives arm after announcement was made regarding closure of derivatives platform. Le Monde reported that french division of exchange was under investigation due money laundering allegations & failure in adhering KYC protocol .

Impact on Crypto Markets

Crypto markets were significantly impacted after these lawsuits were announced , prices fell drastically & investors became wary about future implications . These lawsuits not only impact prices but also create trust issues amongst customers who are concerned about their funds security .

Conclusion

It is yet too early speculate outcome of these proceedings , however it can be said that such incidents will have long term implication over crypto sphere . Investors are advised cautious approach towards investments as market is highly volatile due such events .