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Binance, a leading cryptocurrency exchange, along with its CEO, Changpeng “CZ” Zhao, is preparing to address the legal challenges posed by the United States commodities regulator. In a recent submission to an Illinois District Court dated July 24, various Binance entities, Zhao, and former chief compliance officer Samuel Lim expressed their intention to file motions to dismiss the complaint that was filed in March, ahead of the impending deadline of July 27.
“The Foreign Binance Entities and Zhao plan to submit a joint Motion to Dismiss the Complaint. Lim intends to submit a separate Motion to Dismiss the Complaint and will join parts of the motion filed by the Foreign Binance Entities and Zhao,” the filing specified.
Additionally, Binance is requesting authorization to extend the standard 15-page limit on its brief. The exchange seeks to increase it to 50 pages, citing the complex nature of the lawsuit against them. This request underscores the importance of the case and the detailed arguments they intend to present in support of their motions to dismiss.
The Commodity Futures Trading Commission (CFTC) had previously initiated a lawsuit against Binance and Zhao in March, alleging that the crypto exchange failed to register properly with the regulator. The CFTC claimed that although Binance restricted U.S. residents from accessing its platform, it knowingly facilitated transactions in various cryptocurrencies for individuals based in the U.S. since 2019, thereby intentionally breaching U.S. laws.
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As a result, the regulator further accused Binance of maintaining a “sham” compliance process and intentionally conducting operations outside the U.S. to evade adherence to U.S. regulations. These allegations have placed Binance under significant scrutiny and raised concerns regarding its compliance with regulatory standards.
However, Binance’s challenges did not end there. The Securities and Exchange Commission (SEC) entered the legal battle on June 5, filing a lawsuit against Binance and Zhao. The SEC alleged that Binance sold unregistered securities, permitted U.S. customers to access its global platform, and accused Zhao of misappropriating customer funds.
In a troubling statement, the SEC presented evidence indicating that Binance’s compliance chief, presumably Lim, acknowledged in a message to another officer that they were “operating as a fking unlicensed securities exchange in the USA bro.”
Furthermore, recent reports indicate that the U.S. Department of Justice is investigating Binance for allowing Russians to utilize its platform in violation of U.S. sanctions, complicating the exchange’s legal challenges further.
Binance and CZ Zhao are confronting multiple legal issues and are committed to mounting robust defenses. Nevertheless, the outcomes of these lawsuits will have a significant impact on the future of the cryptocurrency exchange sector and may establish critical precedents for regulatory compliance. The crypto community is keenly awaiting the court’s rulings.
The post Binance and CZ Zhao Plan to Dismiss US Commodity Regulator’s Lawsuit appeared first on BitcoinWorld.
