Binance Formally Moves to Dismiss CFTC’s Case
After days of anticipation, Binance’s legal team has formally lodged a plea for the dismissal of the Commodities Futures Trading Commission’s (CFTC) court case against the crypto exchange, taking a similar route as Coinbase and Bittrex have in the past.
CFTC’s Jurisdiction Challenged in Binance’s Plea
The comprehensive plea, extending a significant 49 pages when including annexes and other norms, goes beyond the usual 15 pages permitted by such a plea. Given the broad accusations brought forth by the CFTC, Binance’s legal team found it essential to extend beyond the customary limit. The plea is rooted in refuting the CFTC’s jurisdiction as neither the exchange nor its CEO reside or hold headquarters in the United States.
CFTC’s Jurisdiction Over Foreign Entities Questioned
Echoing CEO CZ’s opinion shared on Binance’s blog, the plea accuses the CFTC of attempting to regulate foreign entities and individuals. Since Binance is not based in the US, and CZ, a Canadian national, does not permanently reside within the US, the company contends that it operates beyond the jurisdiction of any US regulatory entity.
Binance’s Criticisms of CFTC’s Accusations
Binance’s plea takes issue with the CFTC’s accusation of the firm knowingly facilitating cryptocurrency, fiat, and other financial transactions on behalf of US corporations or citizens while acknowledging the final customer in these transactions is often unidentified.
Binance’s Stance as an Intermediary
Binance’s defense pivots around the exchange’s role as an intermediary rather than a vendor. The lawyers argue that Binance primarily serves as a marketplace where third parties transact cryptocurrencies. While the exchange can choose to sell from its reserves, the primary sources of cryptocurrencies sold to Binance customers are other users’ wallets, negating the accusation of client solicitation.
As Binance and CZ await the court’s response, other court cases and investigations from various regulatory entities continue to loom, regardless of the outcome of the CFTC case.