Binance, CZ, and Lim Advocate for Dismissal of CFTC’s Lawsuit
The leading cryptocurrency exchange Binance, along with its CEO Changpeng Zhao (CZ), and the company’s former compliance chief Samuel Lim, have sought to dismiss a significant lawsuit lodged against them by the US Commodity Futures Trading Commission (CFTC). The legal action taken by the CFTC on March 27, 2023, charges Binance with violations of the Commodity Exchange Act by offering futures trades without the necessary registration as a futures commission merchant (FCM).
In a compelling legal maneuver, Binance and CZ have collectively filed one motion to dismiss the charges, while Lim has chosen to independently file his own. Notably, the defendants have made a request to the court, seeking permission to present a considerably expanded 50-page response. This contrasts with the current restriction, which limits their response to just 15 pages.
The Clock Ticks as Response Deadline Looms
Court documents dictate that the defendants must submit their comprehensive response to the CFTC’s allegations by July 27. The submission must be made to the US District Court for the Northern District of Illinois. The looming deadline comes in the wake of yet another legal challenge for Binance and CZ, this time from the US Securities and Exchange Commission (SEC), accusing them of contravening the country’s securities laws.
Binance Faces Mounting Global Scrutiny
The legal challenges for Binance are not limited to the United States. Recently, Australian authorities have launched their own investigation, paying unexpected visits to Binance’s local offices. The Australian Securities and Investments Commission (ASIC) has initiated its scrutiny of the exchange’s derivatives arm. This action follows Binance’s recent announcement expressing its intention to shutter its derivatives platform in Australia.
Complicating matters further for Binance, the respected French newspaper Le Monde reported on June 17 that Binance France is now under investigation. The exchange is suspected of money laundering and alleged failure to comply with its know-your-customer (KYC) procedures. This mounting global scrutiny underlines the increasing challenges facing Binance and the wider cryptocurrency industry. As authorities around the world tighten their regulatory grip, the future of cryptocurrency exchanges like Binance remains uncertain.
