The US Securities and Exchange Commission (SEC) and the crypto exchange Binance have jointly requested a 60-day suspension of their ongoing legal dispute. Further lawsuits could also soon be dropped if the Trump administration follows through with its pro-crypto stance.
This move comes in the wake of the establishment of a new SEC task force for developing crypto regulations and signals a more favorable stance towards the crypto industry under the current US administration. The suspension of the lawsuit could be the first step toward a full resolution. Currently, SEC proceedings are ongoing against the exchanges Binance, Coinbase, and Kraken.
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Background of the lawsuit
In June 2023, the SEC filed a lawsuit against Binance, its US subsidiary, and Founder Changpeng Zhao (“CZ”), accusing them of artificially inflating trading volume, misappropriating customer funds, and misleading investors about market surveillance practices. As a result, the Binance founder served four months in prison. A federal judge ruled last year that most of the SEC’s allegations against Binance could proceed to trial.
In November 2023, Binance had already reached a settlement with law enforcement agencies. CEO Changpeng Zhao admitted to violating US anti-money laundering regulations and stepped down from his position. The revelation of internal chat logs made the accusations undeniable. Senior Binance employees acknowledged terrorism financing and instructed compliance officer Gerald Lim to falsify corporate audits, as CVJ.CH reported at the time. The company's cooperative attitude earned them a lower penalty than originally foreseen.
Suspension of the SEC vs. Binance case
Now, both parties jointly filed a motion with the US District Court for the District of Columbia, as revealed in a court document. This motion requests a 60-day pause in the proceedings. Binance and the SEC justified the request by citing the recent establishment of an SEC task force for cryptocurrencies, led by Acting Chairman Mark Uyeda. The work of this task force could influence and facilitate the resolution of the case. At the end of the 60-day pause, the SEC and Binance plan to submit a joint status report, which may also include the possibility of extending the suspension.
At the same time, blockchain analysts uncovered suspicious crypto transfers by the exchange. Binance has reportedly sold nearly all of its Bitcoin, Ethereum, and Solana holdings. Specifically, these holdings amount to just over $5 billion in cryptocurrencies, which the company had previously recorded as profit and held as an additional reserve separate from customer funds. This move could indicate that Binance is preparing for an expensive settlement with the SEC and other authorities. The legal dispute with the US Department of Justice has already cost the company $4 billion.
