- Binance and the SEC have filed a joint motion to pause their lawsuit for 60 days.
- Binance praised the SEC’s new crypto task force for promoting a more crypto-friendly approach.
Binance has caught the attention of the U.S. Securities and Exchange Commission (SEC) after the agency requested a pause in their legal battle. This surprising move signals a shift in the SEC’s stance toward crypto under a new administration.
Joint Motion for a 60-Day Stay
Binance and the SEC jointly filed a motion in court on Monday, requesting a 60-day stay in the lawsuit that has been ongoing for two years. The SEC cited the launch of a new crypto task force, headed by Acting Chairman Mark Uyeda, which aims to foster better relationships with the cryptocurrency industry. The agency believes this task force could impact the resolution of the case.
A Tangible Change in SEC’s Approach
This filing marks a significant change in direction for the SEC, according to Carol Goforth, a professor at the University of Arkansas School of Law. She stated that this motion represents “tangible action” reflecting the agency’s evolving approach to cryptocurrency regulation.
The Initial Lawsuit and Accusations Against Binance
The SEC’s initial lawsuit against Binance was launched under the leadership of Gary Gensler, the previous SEC chairman. Gensler accused Binance and its founder, Changpeng Zhao, of orchestrating a “web of deception” while operating unlicensed securities exchanges in the U.S. The case gained attention when the SEC posted evidence of alleged wrongdoing, including a quote from Binance’s chief compliance officer in 2018 admitting to operating as an unlicensed exchange.
Regulatory Tensions and Industry Pushback
The legal issues surrounding Binance reflect broader concerns within the cryptocurrency industry about the SEC’s stance on digital assets. The agency has been at the forefront of regulating whether cryptocurrencies should be classified as securities. This has led to friction between regulators and the crypto industry, with many industry players pushing back against such classifications.
The Impact of the FTX Collapse
The regulatory focus on exchanges like Binance and Coinbase intensified after the collapse of FTX, the now-infamous crypto exchange. The industry felt unfairly targeted, especially under the leadership of Gensler, and crypto advocates are now hopeful that new, more favorable regulations might emerge with the change in leadership.
The SEC’s New Crypto Task Force
In response to mounting concerns, Uyeda launched the SEC’s crypto task force in January. Its goal is to reset the agency’s approach to crypto by focusing on clearer guidelines and solutions for companies seeking to register with the SEC. This shift marks a departure from the SEC’s previous reliance on enforcement actions and untested legal interpretations.
What This Means for Other Crypto Cases
Legal experts believe the pause in the Binance case could set a precedent for similar legal actions against other exchanges. James Murphy, a securities law expert, speculated that these cases may either be dismissed or settled favorably for the defendants. However, some see this shift with skepticism. Corey Frayer, a former SEC official, warned that delaying the Binance case while welcoming crypto’s resurgence could have unintended consequences for ongoing crypto litigation.
Binance Response to the SEC’s Shift
Binance has consistently argued that the SEC’s case against it is without merit. The exchange praised Uyeda’s approach, calling it a step forward for ensuring that digital assets receive proper regulatory focus.
