SEC Abandons Legal Action Against Binance and CEO CZ: Court Document Reveals Decision
Securities and Exchange Commission Drops Lawsuit Against Binance
In a significant move that could reshape the regulatory landscape for cryptocurrency exchanges, the Securities and Exchange Commission (SEC) has filed a motion to dismiss its long-running lawsuit against Binance, its founder, and U.S.-based sister company. The development, announced on Thursday, comes amidst a shift in the regulatory approach under the current Trump administration.
The SEC originally filed the lawsuit in 2023, accusing Binance, its founder Changpeng "CZ" Zhao, and Binance.US of offering unregistered securities, failing to prevent U.S. users from accessing the main exchange, and commingling customer funds, among other violations.
At the heart of the allegations was the claim that Binance attempted to evade U.S. securities laws by announcing sham controls that were disregarded behind the scenes. According to the lawsuit, Binance's Chief Compliance Officer at the time alleged in a conversation with another Binance compliance officer: "We are operating as a f*cking unlicensed securities exchange in the USA bro."
However, with the appointment of Chairman Paul Atkins, the SEC has taken a more lenient stance on crypto regulation, dramatically reversing course from the more aggressive approach during the Biden era, which saw numerous lawsuits filed against crypto firms, including Binance and Coinbase.
Commenting on the development, a Binance spokesperson called it a "landmark moment" and expressed gratitude to Chairman Atkins and the Trump administration for recognizing that innovation cannot thrive under regulation by enforcement. "The U.S. is back-leading from the front in the future of blockchain," the spokesperson added.
The SEC's decision to drop the lawsuit against Binance.US has been welcomed by the company, which stated that it confirmed what it has always known—that it did not violate U.S. securities laws. The move, according to Binance.US, would allow it to focus entirely on growing its business and restoring relationships impacted by the SEC.
The SEC's shift in approach towards the crypto industry could signal a move towards clearer regulatory guidelines, potentially leading to increased investment and development in the sector. This aligns with the industry's calls for less restrictive regulations, suggesting a more collaborative approach to regulating cryptocurrencies.
Editor's note: This story was updated after publication with additional details and comments from Binance and Binance.US.
Editor's note: This story was updated after publication with additional details and comments from Binance and Binance.US.
Edited by Andrew Hayward
Daily Debrief Newsletter
- The SEC's decision to dismiss its lawsuit against Binance, Binance's founder, and its U.S.-based sister company could redefine the regulatory landscape for crypto exchanges.
- The SEC originally accused Binance of offering unregistered securities, allowing U.S. users access to the main exchange, commingling customer funds, and other violations.
- The SEC's Chief Compliance Officer at the time reportedly admitted in a conversation with another Binance compliance officer that Binance was operating as an unlicensed securities exchange in the USA.
- Binance's spokesperson noted that the U.S. is leading once again in the future of blockchain technology, following the SEC's decision to drop the lawsuit.
- The SEC's shift in approach towards the crypto industry could lead to clearer regulatory guidelines, fostering increased investment and development in the sector and aligning with the industry's calls for less restrictive regulations.
