US civil suit against Binance.com: What’s the real motivation?

On March 26, the US Commodity Futures Trading Commission (CFTC), a government agency that regulates the country’s derivatives markets, filed a civil complaint against Binance in a federal court. The true motive behind the move, however, is still up for debate.

The complaint alleged that Binance.com illegally conducted business in the country and failed to police its staff.

Changpeng Zhao, CEO and founder of Binance / Photo credit: MX Global

But not everyone sees it that way. Many people online consider the suit as a US attack on crypto firms.

Others think the government is targeting non-US tech firms in hopes of remaining internationally dominant. Some argue the lawsuit is unlikely to ever go to trial and designed to bring Binance into negotiations with the US government.

The timing raises questions, according to Jonathan Low, CEO and founder of Dubai-registered Solswipe. That the announcement came only a week after the collapse of three banks in the US is just an attempt to “change optics” away from the failures of the banking system.

“I honestly feel it could be a show,” he says. “I strongly believe that this is just finger-pointing.”

Low, who is from Singapore, also thinks this move is part of an American attempt to curb the growth of foreign tech companies. He cites the recent hearings and pending legislation against short-video platform TikTok as another example.

“I really feel that the US has always loved to have control over what’s going on,” stresses Low, whose company offers crypto debit cards.

Julian Hosp, CEO of Singapore-based crypto platform Cake DeFi, understands why some may perceive the situation that way.

A crypto fan might see it as “a tendency from the US to be a bit questionable toward the entire industry,” but Hosp wouldn’t go as far as calling it a display of power.

But he does concur with Low that the US might be trying to protect its business interests overseas, which is to be expected, he says.

“Look at Michael Jordan in basketball. Look at Tiger Woods and golf. They are the best of the best. They do whatever it takes to win,” Hosp says. “So why would we believe that the no. 1 government in the world is not going to try to do this?”

But motivations aside, Hosp points out that many in the industry had expected the suit and most people would agree that not all of the allegations against Binance are baseless.

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