Binance, the largest cryptocurrency exchange in the world by trading volume, has accused the United States Commodity Futures Trading Commission (CFTC) of attempting to impose its rules on global markets.
In a recent legal filing, Binance contended that the U.S. regulator is trying to oversee foreign companies that have not conducted business in the country through its laws. Binance claims the regulator is overstepping its jurisdiction by attempting to monitor offshore firms like Binance that have not operated in the U.S. market. The filing implies the regulator is overreaching with its legislation to target international crypto exchanges based outside of its authority.
“In this action, the agency seeks to regulate foreign individuals and corporations that reside and operate outside the United States,” the company said. Binance’s filing comes as the exchange is facing increased regulatory scrutiny worldwide, including charges from the CFTC in March for offering derivatives products aimed at the US market. The company has denied the allegations. Binance has stressed the difference between its company and its US entity, Binance.US, stating that it does not operate in the US market.
The Securities and Exchange Commission (SEC) has also filed a lawsuit against Binance.US alleging that the exchange offered trading services with unregistered securities, commingled user assets, and used improper registrations. Binance.US has argued that it did not breach local laws since it was not involved in the alleged activities.
Binance requested the court dismiss the regulator’s allegations that it has a “fetish for secrecy” and defies regulatory rules. Binance stated the regulator used inflammatory language and lacked jurisdiction over the company. Binance also contended the regulator failed to adequately plead the required components of its anti-evasion claim. Additionally, Binance said the regulator did not properly attribute the broader trades to either its domestic or foreign entities in several of the counts against it.
The recent regulatory actions against Binance and oinbase">Coinbase have resulted in decreased trading volumes as users express skepticism over the pending lawsuits. Observers have flagged widespread exits from the firm as “little disturbing” in light of market realities. However, Binance remains optimistic that it can overcome regulatory challenges as it continues to expand its presence in jurisdictions around the world.
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