Binance CEO Changpeng Zhao plans to appeal the CFTC lawsuit

By: Mark Jessy

July 25, 2023 7:47 AM

In response to a complaint filed by the CFTC in March, Binance, Changpeng Zhao, and former compliance officer Samuel Lim plan to submit two motions for the dismissal of the case.

Binance and its CEO, Changpeng "CZ" Zhao, want to file a request seeking a judge to dismiss a case filed by the US commodities regulator.

Multiple Binance businesses, Zhao, and former Chief Compliance Officer Samuel Lim stated in a July 24 filing→ to an Illinois District Court that they intend to file two separate petitions to dismiss the case by July 27.

"The Foreign Binance Organizations and Zhao seek to file a joint Motion for dismissal of the Complaint. Lim plans on filing a separate Motion for the Dismissal of the Complaint, as well as joining parts of the motions issued by the Foreign Binance Entities and Zhao," according to the document.

Binance is also requesting that the brief used to support its motion be extended beyond the 15-page limit. The exchange requested that the brief be expanded to 50 pages due to the complexity of the Commodity Futures Trading Commission's complaint against it in March.

An excerpt from Binance's request demanding a 15-page increase. Source: CourtListener.

"Defendants anticipate that their Memoranda of Law in defending the two motions will exceed the fifteen-page limits," the motions' memoranda of law state, "given the complexity of the CFTC's Lawsuit and the amount of claims Defendants anticipate making in defense of their Motions to Dismiss."

In March, the CFTC filed→ a lawsuit against Binance and Zhao, claiming the cryptocurrency exchange had not followed all of the necessary registration procedures.

The CFTC stated that, despite Binance prohibiting US persons from trading on its platform, it has knowingly executed transactions in several cryptocurrencies for US residents since at least 2019 and has purposefully violated US laws.

Binance's compliance approach was also labeled a "sham" by the regulator, who claimed the company willingly operated its operations outside of the United States and concealed the location of its headquarters in order to avoid U.S. legislation.

On June 5, the Securities and Exchange Commission sued Binance and Zhao, alleging that they offered unregistered securities, let US consumers use their global platform, and that Zhao misappropriated customer cash.

According to the SEC's lawsuit, Binance's compliance chief, believed to be Lim, stated in a message to another compliance officer in 2018 that "we are operating as a fking unregistered securities exchange in the USA bro."

The US Department of Justice is also apparently investigating Binance for allegedly allowing Russians to utilize its platform in breach of US sanctions.