- Binance has responded to the CFTC lawsuit.
- Lawyers want the court to dismiss the lawsuit on multiple grounds.
- The issue of “incendiary” language was raised.
As regulatory pressure continues to pile on Binance, the world’s largest crypto exchange by trade volume, the exchange has embarked on a renewed push to toss the lawsuit brought against it by the U.S. Commodity Futures Trading Commission (CFTC).
Specifically, lawyers representing Binance and the exchange’s founder, Changpeng “CZ” Zhao, want the court to dismiss a range of allegations brought against the parties by the CFTC.
CFTC’s Allegations Labeled “Impermissibly Extraterritorial”
In a March 27 sweeping lawsuit that demanded a jury trial, the CFTC pressed multiple charges against Binance and CZ, accusing the defendants of “running an opaque web of entities” that “solicited and accessed” U.S.-based customers to offer a range of digital asset spot and derivative transactions on the Binance platform.
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The commission then filed a subsequent response on September 22, alleging that CZ “deliberately targeted” the U.S. market with unregistered crypto derivatives.
In response to this, among other allegations, the lawyers called out the CFTC, arguing that its response brief underscored the pleading deficiency in the commission’s complaint against Binance, CZ, and other defendants.
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Further, the lawyers submitted that the CFTC relied on “new and broad” arguments allowing the commission to regulate any crypto activities related to a derivatives product “anywhere on the globe,” adding that the agency’s overreaching theories of its jurisdiction are unfounded.
“U.S. law governs domestically but does not control the world. 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,” the filing read.
Notably, the lawyers seemed to be irked by the language the CFTC used in its complaint.
Protestation Against CFTC’s “Incendiary” Language
The lawyers did not hesitate to raise issues about the CFTC’s language in the September 22 court filing, terming it “incendiary” and an “apparent dislike” of non-U.S. defendants.
According to the lawyers, the CFTC’s submission embodies a direct attack on the defendants and would have consequences far beyond the case, contrary to what Congress intends.
Read why Binance.US froze direct USD withdrawals:
Binance.US Freezes Direct USD Withdrawals in New User Terms
Stay updated on how CZ recently contradicted Binance’s lawyers:
CZ Contradicts Binance’s Own Lawyers in Asset Custody Claims
