US SEC Ends Legal Fight Against Binance, Sparks Speculation Of Crypto Policy Shift Under Trump
The US Securities and Exchange Commission (SEC) has officially ended its high-profile lawsuit against global cryptocurrency exchange Binance Holdings Ltd and its co-founder, Changpeng Zhao. Filed in June 2023, the case accused Binance of serious violations, including market manipulation and investor deception. However, the sudden voluntary dismissal this week, filed with prejudice, meaning it cannot be revived, has left the crypto community buzzing, particularly in light of the Donald Trump administration’s reported shift in approach to digital assets.
This legal turnabout was formalised in a joint stipulation submitted by lawyers representing the SEC, Binance, and Zhao to a federal court in Washington, D.C. The regulator stated that the decision to drop the case was taken “in the exercise of its discretion and as a policy matter.” It clarified that the move does not reflect the SEC’s stance on other ongoing or future crypto-related litigations.
What Triggered the SEC’s Original Crackdown?
The lawsuit stemmed from allegations that Binance had inflated its trading volumes, misused customer funds, and misrepresented its internal compliance mechanisms. Additionally, the SEC under the previous Biden administration claimed Binance was unlawfully offering several cryptocurrencies that should have been registered as securities.
Back in February, both parties had sought a 60-day pause in proceedings. The delay was linked to a new task force established by then-acting SEC Chairman Mark Uyeda, aimed at reviewing the regulatory framework for crypto. The implications of this task force's findings were cited as potentially significant to the case’s trajectory, as per Bloomberg.
Binance Celebrates Legal Victory
For Binance, the dismissal has been cause for celebration. Taking to X, the company hailed the outcome as a “huge win for crypto.” In the same post, Binance thanked SEC Chair Paul Atkins and President Donald Trump “for pushing back against regulation by enforcement.” A spokesperson for the company also called it a “landmark moment.”
While this may be seen as vindication for the exchange, it’s not Binance’s first brush with American regulators. In a separate criminal case concluded in November 2023, the company admitted guilt and agreed to pay a staggering $4.32 billion penalty for breaching federal anti-money laundering and sanctions laws. That case, brought after a multi-agency investigation, led Zhao to plead guilty and serve a four-month prison sentence. He stepped down as CEO shortly after his release in September.
A Shift in the Crypto Winds?
Though the SEC emphasised that the case's dismissal doesn't imply a change in its broader crypto stance, the timing has drawn attention. Reuters suggested the move could indicate a shift in crypto regulatory policy under President Trump, who has increasingly positioned himself as pro-crypto in contrast to his predecessor.
As Washington debates the future of digital assets, this latest development may serve as both a relief to some in the crypto sector and a warning that the tides of regulation can turn just as swiftly as the markets themselves.
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