Binance Fights Back Against CFTC Lawsuit, Alleges Global Regulatory Overreach
Binance, the world’s largest cryptocurrency exchange, is making another attempt to have the lawsuit filed against it by the U.S. Commodity Futures Trading Commission (CFTC) dismissed. The exchange argues that the regulatory agency is attempting to expand its jurisdiction beyond the United States.
The Lawsuit and Binance’s Response
In March, the CFTC sued Binance and its CEO Changpeng Zhao (CZ), accusing them of violating U.S. trading and derivatives rules by offering commodity derivatives transactions to U.S. individuals since July 2019. Binance initially sought dismissal of the complaint in July, which was disputed by the Commission in September.
In its latest filing, Binance argues that the CFTC’s response confirms that its jurisdictional theories are unfounded. The exchange accuses the agency of trying to regulate foreign individuals and corporations outside of the United States, contrary to the limits set by the U.S. Commodity Exchange Act.
Expanding Regulatory Power
Binance points out that the CFTC has introduced new arguments that would give it the power to regulate any activity related to cryptocurrency or other assets worldwide. The exchange warns that allowing this would have consequences beyond this specific case and goes against Congress’ intentions. Binance calls for the dismissal of the lawsuit based on various grounds, including claims of impermissible extraterritoriality.
Regulatory Pressure on Binance
This year, Binance has faced increased regulatory scrutiny. In addition to the CFTC lawsuit, it was also sued by the Securities and Exchange Commission (SEC) in June for alleged violations of U.S. securities laws. The exchange is also reportedly under investigation by the U.S. Justice Department for suspected sanctions violations.
Hot Take: Binance Challenges CFTC’s Global Reach
Binance is pushing back against the CFTC’s attempt to expand its regulatory reach beyond the United States. The exchange argues that the agency’s jurisdictional claims are unfounded and would have significant implications for the cryptocurrency industry as a whole. By seeking the dismissal of the lawsuit, Binance aims to protect itself and other foreign individuals and corporations from potential overreach. This case highlights the ongoing tension between regulators and cryptocurrency platforms, as they navigate the boundaries of jurisdiction in a global digital landscape.
By
By
By
By
By