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The US financial regulator continues to signal its changed stance towards cryptocurrencies under the Donald Trump administration.
The Associated Press reported that the US Securities and Exchange Commission (SEC) is seeking to pause its high-profile lawsuit against the cryptocurrency exchange Binance.
Binance is the world’s largest cryptocurrency exchange – a digital marketplace where customers can buy, sell and store different types of crypto. But it has been in trouble with a number of US agencies over the past couple of years.
US problems
In March 2023 the Commodity Futures Trading Commission had filed a lawsuit against Binance, which alleged the exchange was operating an “illegal” exchange and a “sham” compliance program.
And then in June 2023 the Securities and Exchange Commission took over and filed lawsuits against both Coinbase and Binance, as well as against Binance’s founder and CEO Changpeng Zhao (also known as CZ). It filed 13 charges against Binance, Zhao and the operator of its purportedly independent US Exchange.
The SEC alleged that, while Zhao and Binance publicly claimed that US customers were restricted from transacting on Binance.com, Zhao and Binance in reality subverted their own controls to secretly allow high-value US customers to continue trading on the Binance.com platform.
Further, the SEC alleged that, while Zhao and Binance publicly claimed that Binance.US was created as a separate, independent trading platform for US investors, Zhao and Binance secretly controlled the Binance.US platform’s operations behind the scenes.
And Binance was also in trouble with the US Justice Department (DoJ).
In November 2023 Binance paid $4.3bn in penalties to the DoJ over criminal charges relating to money laundering and violating sanctions.
The DoJ investigation included allegations that Binance had enabled evasion of sanctions against Iran and Russia and finance for Hamas.
In May 2024 Changpeng Zhao pleaded guilty and was sentenced to four months in prison for looking the other way as criminals used his platform to move money connected to child sex abuse, drug trafficking and terrorism.
Zhao stepped down from the platform.
In November 2024 Zhao Changpeng said he had no wish to return to the firm even if he were allowed, after serving four months in a US prison from June to September 2024.
Pausing lawsuit
Now the Associated Press has reported Binance and the SEC have filed a joint motion Monday asking for a 60-day stay.
Monday’s filing in the US District Court for the District of Columbia said the SEC approached Binance asking for the pause.
The regulator reportedly said the work of a new crypto task force launched by Acting Chairman Mark Uyeda that is supposed to improve ties to the crypto industry “may impact and facilitate the potential resolution of this case.”
It marks a notable change in stance for the SEC, who under former chairman Gary Geslet, adopted a much more combative approach to the sector, and warned that the crypto industry is “rife with bad actors”.
In a statement, Binance told the AP the SEC’s case “has always been without merit” and praised Uyeda for “his thoughtful approach to ensuring digital assets receive the appropriate legislative and regulatory focus in this new, golden era of blockchain in the US and around the world.”
