Cryptocurrency exchange Binance and its CEO, Changpeng Zhao, are planning to file motions seeking the dismissal of a lawsuit filed against them by the US commodity watchdog. In a filing made on July 24 with the Illinois District Court, various Binance entities, Zha o, and former chief compliance officer Samuel Lim stated their intent to file two separate motions to dismiss the complaint by July 27.
The filing indicated that the foreign Binance entity and Zhao intend to file a joint motion to dismiss the complaint, while Lim plans to submit a separate motion and join certain portions of the motion filed by the foreign Binance entity and Zhao. Binance is also seeking permission to submit a brief exceeding the standard 15-page limit in support of its motion. The exchange requested an increased limit of 50 pages, citing the complexity of the lawsuit filed against it by the Commodity Futures Trading Commission (CFTC) in March.
The CFTC had sued Binance and Zhao, alleging that the cryptocurrency exchange was not properly registered with the regulator. According to the complaint, Binance blocked US residents from trading on its platform but knowingly facilitated multiple cryptocurrency trades for US residents Since at least 2019, thereby will fully violating US law. The watchdog accused Binance of operating a "scam" compliance process and delicately operating outside the United States while concealing its headquarters' location to evade US oversight.
In addition to the CFTC's lawsuit, the US Securities and Exchange Commission (SEC) also filed a suit against Binance and Zhao on June 5. The SEC accused the exchange of selling unregistered securities and allowing US clients to use its global platform, and alleged that Zhao misused client funds. The SEC complaint cited messages suggesting that Binance operated as an unlicensed securities exchange in the United States. Binance is also under investigation by the US Department of Justice for allegedly allowing Russians to use its platform in violation of US sanctions.
