Binance and SEC Request 60-Day Pause in Legal Case

Binance and the U.S. Securities and Exchange Commission (SEC) have jointly requested a 60-day pause in their ongoing legal proceedings.

The court filing, submitted on Monday, explained that this request for a stay comes in light of the SEC’s new task force, which aims to develop a clearer regulatory framework for cryptocurrencies. The document stated, “The work of this task force may impact and facilitate the potential resolution of this case.” Thus, the SEC proposed a brief stay to the defendants, who agreed that this pause is appropriate.

The defendants in the proceedings include Binance, co-founder Changpeng Zhao, BAM Trading Services, and BAM Management US Holdings. The filing also mentioned plans to submit a joint status report at the end of the 60-day period to determine if an extension of the stay is needed.

Originally filed in June 2023, the SEC’s complaint against Binance contained 13 charges, claiming that the exchange operated unregistered exchanges, broker-dealers, and clearing agencies for financial securities. In June 2024, a federal judge dismissed some charges related to Binance’s BUSD, Simple Earn programs, and secondary sales of BNB but upheld many of the SEC’s claims.

The SEC, led by former chair Gary Gensler, has pursued lawsuits against other significant crypto players such as Ripple, Coinbase, and Kraken, with similar allegations to those against Binance. There has been criticism from industry members and experts regarding the SEC’s lack of clear guidance on what cryptocurrency offerings might violate federal securities laws.

A Binance spokesperson told The Block that the exchange is “grateful” for the new SEC leadership’s efforts to focus on appropriate legislation and regulation for digital assets. They added, “The SEC’s case has always been without merit, and we are eager to put this behind us.”

SEC Crypto 2.0

Gensler, who faced significant backlash from the crypto industry for his “regulation by enforcement” approach, stepped down last month following the re-election of Donald Trump as U.S. President. His departure has been viewed favorably by crypto advocates.

Trump appointed pro-crypto SEC Commissioner Mark T. Uyeda as acting chair and designated former regulator Paul Atkins to become SEC chairman, pending Senate confirmation. Under this new leadership, the SEC is reportedly reducing its crypto enforcement unit. According to the Wall Street Journal, chief litigation counsel Jorge Tenreiro, who oversaw several crypto lawsuits, has been reassigned to the agency’s IT department.

SEC Commissioner Hester Peirce, who leads the SEC’s crypto task force, stated that the team aims to provide clarity on which crypto assets qualify as financial securities while prioritizing the classification of certain tokens as “non-securities.”

The SEC affirmed that its previous approach relied heavily on enforcement actions for regulatory purposes and emphasized that the new task force will focus on defining regulatory boundaries, establishing viable registration paths, developing sensible disclosure frameworks, and deploying enforcement resources effectively.

Updated with comments from Binance.