SEC requests a pause in legal battle with Binance as the agency adapts a crypto-friendly stance

The U.S. Securities and Exchange Commission is seeking to pause its high-profile lawsuit against the cryptocurrency exchange Binance as the regulator tries to present itself as more crypto-friendly under a new administration. The regulator said the work of a new crypto task force launched by Acting Chairman Mark Uyeda that’s supposed to improve ties to the crypto industry “may impact and facilitate the potential resolution of this case.” The filing is the first “tangible action in existing enforcement actions that recognizes a change in direction of the agency,” said Carol Goforth, a distinguished professor at the University of Arkansas School of Law. Gensler said in a statement at the time that Binance and its founder, Changpeng Zhao, had engaged in an extensive “web of deception” while the SEC’s X account posted a graphic highlighting a key piece of evidence of alleged wrongdoing: a quote from Binance’s chief compliance officer saying to another employee in 2018, “We are operating as a fking unlicensed securities exchange in the USA bro.” In a separate case, Binance later agreed to pay a roughly $4 billion settlement and Zhao pleaded guilty to a felony related to his failure to prevent money laundering on the platform. “To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way,” the agency said in announcing the task force. “Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive.” Legal experts said the pause in the Binance case could indicate similar changes in the SEC’s ongoing legal action against other crypto exchanges.