Securities watchdog ends legal action against Binance in notable move
The Securities and Exchange Commission (SEC) has officially withdrawn its lawsuit against cryptocurrency exchange Binance, marking a significant turn of events in one of the agency's most notable enforcement actions within the digital asset space.
In a joint motion filed on May 29, the SEC, Binance, and Binance's previous CEO, Changpeng Zhao, requested the dismissal of the original complaint, which was granted by a federal court in Washington, D.C. According to the SEC's court filing, the decision to drop the case was made in the exercise of the agency's discretion and as a policy matter. The lawsuit's dismissal with prejudice means it cannot be reopened.
Binance announced the decision in a May 30 post on X, expressing gratitude to SEC Chairman Paul Atkins and President Trump's team for their backing against excessive regulation. The crypto exchange hailed the move as a "huge win for crypto" and signaled that U.S. innovation in the digital asset sector is once again on track, with more positive developments likely to follow.
The lawsuit, initiated in June 2023, accused Binance, its U.S.-based arm, and its former CEO of violating securities laws by offering unregistered securities to U.S. investors, mishandling customer funds, and misleading investors. The SEC also alleged that the exchange failed to implement adequate financial controls.
This decision comes after the lawsuit was temporarily halted twice earlier this year, in February and April. The SEC's Crypto Task Force, established under Acting Chair Mark T. Uyeda, played a key role in the decision to move forward with the legal action.
The SEC's recent approach to crypto regulation appears to have shifted under President Donald Trump's second administration. The agency has since dropped or settled several high-profile enforcement actions, including cases against Coinbase, Ripple, Kraken, Robinhood Crypto, Uniswap Labs, and OpenSea. Paul Atkins, who has taken over as SEC Chairman, is known for his pro-crypto stance and commitment to creating a framework for digital assets.
Under Atkins' and Uyeda's leadership, the SEC has held several roundtable discussions on crypto regulation and financial innovation, with Commissioner Hester Peirce playing a key role in these discussions. At present, lawmakers in the U.S. House of Representatives are introducing bills to define how the SEC and the Commodity Futures Trading Commission would oversee digital assets, indicating ongoing efforts to clarify regulatory frameworks.
It is noteworthy that Binance reached a $4.3 billion settlement with the U.S. government last year, during which Zhao pleaded guilty and stepped down as CEO. This ruling marks a positive step towards resolving regulatory uncertainties and fostering growth in the crypto sector.
- In light of the SEC's decision, Binance, in a recent post on X, expressed gratitude towards SEC Chairman Paul Atkins and President Trump's team, acknowledging their support against excessive crypto regulation.
- The SEC's recent approach to crypto regulation, particularly under Paul Atkins' leadership, has led to a shift, with several high-profile enforcement actions against crypto-related businesses, such as Coinbase, Ripple, Kraken, Robinhood Crypto, Uniswap Labs, and OpenSea, being dropped or settled.
- As the SEC continues to hold roundtable discussions on crypto regulation and financial innovation, with Commissioner Hester Peirce playing a key role, lawmakers in the U.S. House of Representatives are introducing bills to define how the SEC and the Commodity Futures Trading Commission would oversee digital assets, indicating ongoing efforts to clarify regulatory frameworks for the burgeoning DeFi and finance sector.
