Binance crypto exchange and its CEO Changpeng Zhao or CZ are gearing up to challenge a complaint filed by the Commodity Futures Trading Commission (CFTC).
The CFTC accused the exchange of violating the Commodity Exchange Act and related federal regulations, alleging Binance operated an illegal digital asset derivatives platform that targeted US citizens.
In response, Binance filed a court motion to seek the dismissal of these charges.
On March 27, 2023, the CFTC formally accused Binance of knowingly and intentionally violating federal law by offering commodity derivatives transactions to US citizens. According to the CFTC’s complaint, this alleged illegal activity started since July 2019
The crux of the CFTC’s argument is that Binance, by providing derivatives trading options on digital assets to US users, was running an unregistered derivatives exchange in violation of the Commodity Exchange Act.
In addition, the Act mandates that any entity dealing in derivatives transactions must be registered with the CFTC, ensuring proper regulatory oversight and investor protection.
In a recent court filing, Binance expressed its intention to fight back against the CFTC’s allegations. The legal team representing the crypto exchange and its founder has filed a motion to seek the dismissal of the complaint.