According to documents submitted to the U.S. District Court for the Eastern District of Illinois, Binance and Changpeng Zhao have requested a federal judge to dismiss the lawsuit brought by the U.S. Commodity Futures Trading Commission (CFTC). The motion argues that the CFTC is attempting to regulate foreign individuals and companies living and operating outside the United States, a move that exceeds its statutory authority and tramples on the principle of comity with foreign sovereign nations. The CFTC cannot assert personal jurisdiction over foreign Binance entities and Mr. Zhao.
Secondly, the motion asserts that the CFTC’s first through sixth charges should be dismissed because they are not allowed to have extraterritorial effect. Each charge is based on regulations and provisions that do not apply to the foreign conduct alleged in this case, and some of these provisions apply only to domestic transactions.
Furthermore, the motion contends that the CFTC’s first, third, fifth, and sixth charges should also be dismissed because the CFTC has not presented the necessary elements for these charges. The CFTC has not linked its registration categories, created for traditional financial markets, with the Binance.com cryptocurrency exchange.
Finally, the motion asserts that the court should dismiss Count VII, the charge of intentionally evading the Economic Competition Act of the United States and its regulatory provisions, arguing, “The CFTC has never previously brought a claim under this provision. By forcing it into this complaint, the CFTC has chosen to test its anti-evasion claim for the first time against a new industry and products that did not exist and were not considered when the regulation was enacted in 2012.