Binance Files Motion to Dismiss CFTC Lawsuit, Challenging Regulatory Reach

In response to a lawsuit filed by the US Commodity Futures Trading Commission (CFTC), Binance, the world’s largest cryptocurrency exchange, has submitted a motion to dismiss the case. Binance’s legal team argues that the allegations made by the CFTC should be dismissed on several grounds.The CFTC’s lawsuit, filed on March 27, accuses Binance and its founder Changpeng Zhao of operating an opaque network of entities that solicited and provided digital asset spot and derivative transactions to US-based customers. Binance’s defense, submitted on October 23, contends that the CFTC’s claims of jurisdiction are “unfounded” and “impermissibly extraterritorial.”Binance’s lawyers assert that the CFTC does not have the authority to extend its regulatory reach worldwide and criticize its attempt to redefine the definition of a “US person” and expand its power overseas. They argue that the CFTC’s claims lack necessary elements and rely on broad, inapplicable legal arguments.The defense further argues that the allegations fail to demonstrate any harm to users of Binance.com and primarily focus on non-compliance with registration requirements and compliance rules. They also warn that the CFTC’s efforts to achieve worldwide regulatory reach through this case would have far-reaching consequences beyond what Congress intended.The defense’s motion to dismiss the lawsuit is based on three main points. First, they argue that the claims should be dismissed due to a lack of personal jurisdiction. Second, they contend that certain claims should be dismissed as impermissibly extraterritorial. Third, they argue that the anti-evasion claim made by the CFTC also fails to meet necessary elements.In conclusion, Binance’s defense requests the court to dismiss the CFTC’s lawsuit on multiple grounds, citing lack of personal jurisdiction, impermissible extraterritorial claims, and failure to plead necessary elements. The outcome of this motion will have significant implications for the regulatory landscape surrounding cryptocurrency exchanges and their operations.