July 21, 2024
Binance confronts U.S. regulators' global reach in a legal clash
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Binance Escalates Defense Against U.S. Regulators in Ongoing Legal Battle

Binance has once again intensified its efforts to defend itself against allegations from U.S. commodity regulators as the world’s largest cryptocurrency exchange faces mounting pressure from regulatory authorities.

In response to the Commodity Futures Trading Commission (CFTC), Binance contends that the regulator is attempting to exert its influence on a global scale by taking legal action against a company that, on the surface, has endeavored to steer clear of U.S. business activities. In a filing submitted by Binance in an Illinois court on Monday, it was stated that the CFTC relies on novel and expansive arguments that would enable it to oversee any cryptocurrency-related or derivatives product activity worldwide. Binance’s filing also emphasized that U.S. law holds sway within its borders but does not extend to the entire world. Congress did not appoint the CFTC as the world’s derivatives regulator. It also criticized the agency for employing inflammatory language in its complaint against Binance and its founder, Zhao.

Back in March, the CFTC charged Binance with knowingly offering unregistered cryptocurrency derivatives. In a subsequent filing on September 22, the agency alleged that Zhao had intentionally targeted the U.S. market and asserted that U.S. commodities law unequivocally governs foreign activities. According to the September filing, Binance has consistently adopted a tacit corporate approach to attracting U.S. customers through creative means, citing instances such as a Binance-hosted Grammy party in Las Vegas.

The regulator’s filing went on to state that Binance and Zhao’s penchant for maintaining secrecy and their refusal to adhere to regulatory obligations have turned Binance into a sanctuary for users of the darknet, criminals, and individuals with nefarious intentions who wish to transfer their assets across the globe.

Binance emphasizes that its U.S. domestic operations are conducted by a separate entity, Binance.US. Both entities are also striving to dismiss a lawsuit brought by another federal regulator, the Securities and Exchange Commission, while rumors of an investigation by the Department of Justice continue to circulate.

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