Binance has responded to the U.S. Commodity Futures Trading Commission (CFTC) in a court filing, asserting that the CFTC’s attempt to regulate global cryptocurrency activities goes beyond its jurisdiction.
In March, the CFTC accused Binance of offering unregistered crypto derivatives to U.S. customers. The CFTC, responsible for overseeing the nation’s derivatives markets, including futures and options, has faced Binance’s objections.
The Commodity Futures Trading Commission today announced it has filed a civil enforcement actionin the U.S. District Court for the Northern District of Illinois charging Changpeng Zhao and three entities that operate the Binance platform with numerous violations of the Commodity Exchange Act (CEA) and CFTC regulations. The complaint also charges Samuel Lim, Binance’s former chief compliance officer, with aiding and abetting Binance’s violations.
In its statement submitted to an Illinois court, Binance argued that while U.S. law is applicable within its borders, it lacks the authority to oversee activities worldwide. Binance criticized the CFTC’s “broad arguments” and contended that the agency should not be seen as the “world’s derivatives police.”
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.
Furthermore, Binance emphasized that its U.S. operations, operating as Binance.US, function independently. The company maintains that only this domestic segment should fall under U.S. regulatory scrutiny.
Additionally, Binance is concurrently facing regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC), which has accused the exchange of violating local securities regulations.