Binance challenges CFTC lawsuit again with bid for dismissal as another key executive departs
|- Binance made a court filing on Monday in response to the US Commodity Futures Trading Commission (CFTC) lawsuit.
- The exchange suggested that the commodities regulator is acting beyond the scope of its duties.
- In March this year, the CFTC sued Binance for allegedly extending unregistered derivatives products.
Binance, the largest crypto exchange by volume, and its top executives responded to the lawsuit by the US Commodity Futures Trading Commission (CFTC) in a filing on Monday. The commodities regulator sued the exchange, CEO Changpeng "CZ" Zhao, and former Chief Compliance Officer Samuel Lim for legal violations in March.
Also Read: Binance files motion to dismiss US CFTC lawsuit, calls it agency overreach
Binance continues to seek lawsuit dismissal
In the Illinois court filing on Monday, October 23, Defendants Binance, CZ and Lim asked to dismiss the complaint due to the "lack of personal jurisdiction."
The document stated, "The CFTC’s response brief underscores the pleading deficiencies in the Complaint and confirms that the agency’s overreaching theories of its jurisdiction are unfounded."
Binance reiterated in its filing that CFTC is trying to regulate a business that operates outside the US soils, underlining its overreach in the case. The document further argued, "Congress did not make the CFTC the world’s derivatives police, and the Court should reject the agency’s effort to expand its territorial reach beyond what is permitted by the law."
In March, the CFTC mentioned that Binance violated at least eight trading provisions under its derivatives rule. In response, CZ called the action an "unexpected and disappointing civil complaint." In July, the top boss of the global exchange filed a motion to dismiss the complaint with a separate filing from the former COO. It was soon after the SEC levered fresh charges against the Binance entities for securities law violations amid a crackdown in several other regions.
The recent submission also raises questions about the CFTC's treatment of the defendants as a unified entity. "The CFTC acknowledges that the Complaint 'lumps' the Foreign Binance Entities together," the document added. The response also underlines that the CFTC's attempt to impute the Foreign Binance Entities' contacts to Mr. Zhao based on an agency relationship cannot be established based on the provided documents and instances.
Binance UK head exits
As Binance's legal troubles mount, the exchange has seen some high-profile departures. Jonathan Farnell, former head of Binance UK and CEO of its payment arm Bifinity, has reportedly left the firm. As per the executive's LinkedIn profile, Farnell joined the firm in May 2021 before exiting in September this year.
Last week, Stéphanie Cabossioras, the managing director of Binance's French unit, also stepped down.
Other notable departures since July include Mayur Kamat, Senior Vice President and Global Head of Product; Brian Shroder, CEO of Binance's US unit; Patrick Hillmann, Chief Strategy Officer with the exchange; Steven Christie, Senior Vice President for Compliance; Hon Ng, the General Counsel; Yibo Ling, Binance US Chief Business Officer.
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