Binance and the U.S. Securities and Exchange Commission (SEC) have agreed to pause their legal battle for 60 days. This is the first time a crypto-related lawsuit has been put on hold since Mark Uyeda became the acting SEC chair.
The SEC and Binance filed a joint motion requesting a “stay” on the case, which means all legal proceedings will be temporarily halted. They explained that the pause is necessary because of a newly established SEC crypto task force.
This task force, according to the motion, could play a key role in resolving the case. The filing stated, “The work of this task force may impact and facilitate the potential resolution of this case.”
During these 60 days, no new legal actions will take place in the case. Once this period ends, both Binance and the SEC will submit a joint status report. This report will help determine whether they should continue with the case or extend the pause.
The legal battle between the SEC and Binance began on June 5, 2023, when the SEC filed a lawsuit against Binance, its U.S. affiliate Binance.US, and its founder Changpeng Zhao (CZ). The SEC accused Binance of violating U.S. securities laws by operating as an unregistered securities exchange and misusing customer funds.
The lawsuit was part of a broader crackdown on cryptocurrency exchanges by U.S. regulators. The SEC claimed that Binance allowed U.S. investors to trade crypto assets that should have been registered as securities and that it misled investors about its trading controls and oversight.
Binance denied these allegations and has been fighting the case in court since then. Although CZ served a term in prison last year.
Many legal experts believe that this move between the SEC and Binance could set a precedent for other crypto-related lawsuits.
According to Eleanor Terrett, cases involving major crypto companies like Ripple, Coinbase, and Kraken might also request similar pauses. This would allow them to assess how the SEC’s new task force might impact their legal situations.
In early November 2024, Binance and CZ filed a request to dismiss a revised set of allegations against the duo. They argue that crypto asset resales in the secondary market, conducted long after the initial distribution, do not qualify as securities transactions.
The decision to pause the case comes at a time when the crypto industry is facing increased regulatory scrutiny in the U.S. The outcome of this case and others like it could have a lasting impact on how crypto exchanges operate under U.S. law.
