• Binance files for dismissal of the CFTC’s case against them.
• The document claims that neither the exchange nor its CEO reside or are headquartered in the United States.
• Binance argues that they are outside of the jurisdiction of any U.S. regulatory entity.
Binance Fights CFTC Lawsuit
Binance recently announced they will be pursuing the dismissal of the Commodity Futures Trading Commission’s (CFTC) court case against them, with a 49-page document addressing the CFTC’s complaints and claims that they are unfounded. The document argues that neither Binance nor its CEO Changpeng Zhao (CZ) reside or are headquartered in the United States, making them outside of the jurisdiction of any U.S. regulatory entity.
Arguments Against Jurisdiction
The document cites CZ’s opinion from an earlier blog post, accusing the CFTC of attempting to regulate foreign entities and individuals beyond their statutory authority and principles of comity with foreign sovereigns. Additionally, it states that since Binance is not a financial institution as defined by Title 5 of U.S Code, it does not fall under any existing regulation and should not be subject to enforcement actions taken by domestic regulators like CFTC or SEC.
Complaints Against Exchange
The CFTC had initially accused Binance of offering illegal cryptocurrency derivatives trading services to US citizens without registering with them first – a claim which was denied by Binance who stated they take all necessary measures to protect their users from accessing prohibited products/services within restricted regions, including through geo-blocking technology as well as enforcing KYC/AML protocols for users in those areas .
Risk Mitigation Measures Taken By Binance
The plea further goes on to detail several risk mitigation steps taken by Binance such as limiting leverage options available on its platform to prevent customers from engaging in speculative trading activities which could be detrimental to their financial health; imposing mandatory limits on user activity such as withdrawals , deposits and trading; providing educational resources about cryptocurrency risks and safe trading practices; actively monitoring market manipulation activities; preventing wash trades; and taking other measures recommended by industry experts .
Conclusion
Moreover, while acknowledging some mistakes made during 2017-2018 period due to lack of experience at scale, it also notes that Binance took corrective action immediately upon discovering those issues and has since been compliant with all applicable laws & regulations wherever it operates – making it difficult for CFTC’s allegations against it stand up in court .