Binance Takes On CFTC with Plans to Seek Dismissal of Lawsuit

<p>Binance and its Founder and CEO, Changpeng Zhao, are
planning to seek the dismissal of a case filed by the Commodity Futures Trading
Commission (CFTC) in March. According to a court document filed yesterday
(Monday), the crypto exchange and Zhao are expected to respond to the complaint on July
27.</p><p>The CFTC is accusing the company and its founder of violating federal regulations
related to the issuance of commodities. Particularly, the regulator claims that
Binance violated the Commodity Exchange Act by allegedly operating an illegal exchange
lacking adequate compliance procedures.</p><p>Additional
Charges </p><p>Additionally, the CFTC claims that Binance offered and facilitated transactions of commodity derivatives on behalf of users in the US against the laws. The lawsuit mentioned Samuel Lim, Binance's former Chief Compliance Officer, as a defendant in the case for allegedly abetting the violations. However, Lim reportedly plans to seek a dismissal of the charges levelled against him.</p><p><a href="https://storage.courtlistener.com/recap/gov.uscourts.ilnd.431767/gov.uscourts.ilnd.431767.53.0_1.pdf" target="_blank" rel="follow">Filed</a> before the US District Court in Illinois, the
CFTC said in the lawsuit: "For years, Binance knew it was violating CFTC
rules, working actively to keep the money flowing, and avoiding <a href="https://www.financemagnates.com/terms/c/compliance/">compliance</a>. This
should be a warning to anyone in the digital asset world that the <a href="https://www.financemagnates.com/terms/c/cftc/">CFTC</a> will not
tolerate willful avoidance of the US laws."</p><p>However, in a <a href="https://www.binance.com/en/blog/from-cz/czs-response-to-the-cftc-complaint-2408916493005890282" target="_blank" rel="follow">blog</a> published on Binance's website, Zhao dismissed the CFTC's complaint, terming it 'unexpected and disappointing'. Zhao
disputed the <a href="https://www.financemagnates.com/cryptocurrency/binance-talks-about-compliance-gaps-and-expects-to-pay-penalties/" target="_blank" rel="follow">claims
by the regulator</a> that
the exchange lacks proper compliance procedures, saying Binance has
implemented the 'best-in-class technology for compliance'.</p><p>Binance and Zhao Face
Legal Hurdles</p><p>Besides that, Binance and Zhao are facing a lawsuit filed by the Securities and Exchange Commission (SEC) in June. The regulator <a target="_blank" href="https://www.financemagnates.com/cryptocurrency/sec-charges-binance-ceo-over-illegal-exchanges-commingling-of-client-fund/">filed 13 charges</a> against the exchange, two affiliated entities, and Zhao for allegedly operating an illegal trading platform, offering unregistered securities, and commingling customers' funds.</p><p>On
top of that, the <a href="https://www.financemagnates.com/tag/doj/" target="_blank" rel="follow">US
Department of Justice</a> is
investigating the exchange for allegedly allowing Russians to use the platform
in violation of the US sanctions following the Russian invasion of
Ukraine. The DOJ's national security department is investigating the exchange for suspected anti-money laundering violations.</p>

This article was written by Jared Kirui at www.financemagnates.com.