In a significant development in the cryptocurrency market, the Securities and Exchange Commission (SEC) has decided to drop its legal action against Binance Holdings. Both parties have jointly requested the suspension of the ongoing case at the U.S. District Court for the District of Columbia. Earlier in February, they had sought a 60-day pause to explore potential resolutions. During that time, the SEC and Binance formed a special task force aimed at establishing clearer regulatory policies for cryptocurrencies that could influence the outcome of the lawsuit. The latest filing asks for the case to be “dismissed with prejudice,” indicating that it cannot be reopened in the future.
Binance celebrated this outcome as a “major victory for cryptocurrency,” expressing gratitude in a post on social media platform X. The company acknowledged SEC Chair Paul Atkins and U.S. President Donald Trump, noting that Trump’s administration promised to adopt a less stringent approach toward cryptocurrencies compared to the previous administration’s repressive stance. Atkins’ appointment as the head of the regulatory body showcased a more crypto-friendly attitude. The resolution of this case may symbolize a broader shift in intentions from Trump and his administration toward a more favorable approach to the crypto industry.
Hester Peirce, a commissioner at the SEC, indicated that this move marks a transition to clearer regulations following years of ambiguity. “In our enforcement cases, we aim to assess them based on their specific facts and circumstances,” Peirce noted. She emphasized the lack of established rules and the numerous inquiries surrounding the intersection of cryptocurrency activities with existing securities laws. To address this, the SEC plans to step back and utilize its regulatory tools to develop and enforce clear guidelines. However, she cautioned that this does not give a free pass to fraudsters. “This is not the time for individuals to think they can exploit cryptocurrencies and deceive others. That’s not the case,” she concluded.
The SEC and Binance: A Recap of Their Dispute
The conflict between the SEC and Binance began in June 2023 when the regulator accused the company and its co-founder, Changpeng Zhao, of mismanaging customer funds, misleading both investors and the authority. The allegations also included violations of U.S. securities laws by offering investments to American clients that required SEC registration.
In November of the same year, Binance and Zhao admitted guilt to separate charges related to anti-money laundering and U.S. regulatory violations, leading Binance to agree to pay a hefty fine of $4.3 billion. Additionally, Binance faced scrutiny not only from the SEC but also from the U.S. Department of Justice, the Commodity Futures Trading Commission, and the Department of the Treasury, all of whom were conducting extensive investigations.
