- Binance has responded to the CFTC lawsuit.
- Lawyers want the court to dismiss the lawsuit on multiple grounds.
- The issue of โincendiaryโ language was raised.
As regulatory pressure continues to pile on Binance, the worldโs 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 exchangeโs founder, Changpeng โCZโ Zhao, want the court to dismiss a range of allegations brought against the parties by the CFTC.ย ย
CFTCโs Allegations Labeled โImpermissibly Extraterritorialโ
In a March 27 sweeping lawsuit that demanded a jury trial, the CFTC pressed multiple charges against Binance and CZ, accusing the defendants of โrunning an opaque web of entitiesโ that โsolicited and accessedโ 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 โdeliberately targetedโ 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 commissionโs complaint against Binance, CZ, and other defendants.
Further, the lawyers submitted that the CFTC relied on โnew and broadโ arguments allowing the commission to regulate any crypto activities related to a derivatives product โanywhere on the globe,โ adding that the agencyโs overreaching theories of its jurisdiction are unfounded.
โU.S. law governs domestically but does not control the world. Congress did not make the CFTC the worldโs derivatives police, and the Court should reject the agencyโs effort to expand its territorial reach beyond what is permitted by the law,โ the filing read.
Notably, the lawyers seemed to be irked by the language the CFTC used in its complaint.
Protestation Against CFTCโs โIncendiaryโ Language
The lawyers did not hesitate to raise issues about the CFTC’s language in the September 22 court filing, terming it โincendiaryโ and an โapparent dislikeโ of non-U.S. defendants.
According to the lawyers, the CFTCโs 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 Binanceโs lawyers:
CZ Contradicts Binanceโs Own Lawyers in Asset Custody Claims
