The Core of Binance’s Argument
Binance and its CEO assert the CFTC’s claim is an overreach, contending that the regulatory body has no jurisdiction over Binance’s operations since the exchange is an international entity based outside the United States. Binance further states the CFTC has failed to establish specific personal jurisdiction over the foreign entities and Mr. Zhao.
Dismissal of the CFTC’s Charges
Highlighting key points in their defense, Binance holds that the CFTC failed to make the required distinction between various Binance entities, unfairly lumping them together, despite each entity having separate roles.
Moreover, the company challenges the CFTC’s attempt to extend its regulatory reach beyond the U.S. through extraterritorial claims. They argue that the allegations do not exhibit the necessary “direct and significant” connection to U.S. commerce justifying the application of CFTC regulations.
Binance on the Offensive Against CFTC’s CEA Charges
Binance has also taken the offensive against the CFTC’s claims regarding violations of the Commodity Exchange Act (CEA) and its regulations. The crypto exchange argues that the regulator did not meet the requirements for proving the charge and that the CFTC has chosen to test this anti-evasion claim for the first time against a novel industry.
Final Take: Binance’s Call for Dismissal
In conclusion, Binance demands the court to completely dismiss the case as the CFTC has failed to establish jurisdiction over the defendants and to plead essential elements of its claims. Binance insists the CFTC lacks regulatory authority over spot trading activities, even in the U.S., let alone abroad.
The case follows the CFTC’s allegations in March that Binance violated U.S. derivatives laws by offering its services to U.S. residents without registering.
Key Points
Who are the defendants in the lawsuit against the CFTC?
Binance Holdings Limited, Binance Holdings (IE) Limited, Binance Holdings (Services) Limited, and CEO Changpeng ‘CZ’ Zhao are named as defendants.
What is Binance’s main argument against the CFTC’s charges?
Binance primarily argues that the CFTC has overstepped its jurisdiction as the exchange operates outside the U.S. and the CEO does not reside there.
What was the response of Binance to the CFTC’s CEA charges?
Binance asserts that the CFTC didn’t meet the requirements for proving the charge and has chosen to test this anti-evasion claim against a new industry for the first time.
What is the CFTC seeking from Binance?
The CFTC is seeking the disgorgement of profits, monetary penalties, and permanent injunctive relief against Binance.
