SEC Drops Hammer—Then Retreats: Binance Lawsuit Abruptly Ends in Crypto Enforcement U-Turn
The Securities and Exchange Commission just folded its cards in a high-stakes game against Binance—marking a stunning reversal for an agency that once vowed to ’clean up’ crypto.
After months of legal saber-rattling, regulators quietly closed the case without explanation. Was it lack of evidence? Shifting political winds? Or just another case of bureaucrats realizing they’re outgunned by blockchain lawyers?
One thing’s clear: Wall Street’s watchdog might need a new leash. Meanwhile, Binance’s native token (BNB) pumps 12% on the news—because nothing makes crypto traders happier than regulatory whiplash.
*Cynical finance jab:* At least the SEC didn’t try to settle for a ’free NFT’ this time.
In both February and April, the SEC and the crypto exchange temporarily halted proceedings, suggesting that the agency’s Crypto Task Force might ultimately lead to the case being dropped.
The SEC filed a lawsuit in June 2023 against Binance, its U.S. affiliate BAM Trading, and co-founder Changpeng Zhao, accusing the crypto exchange of breaching securities laws, misusing customer assets, and providing misleading information to investors.
SEC Shift Evident in Ripple Deal Ahead of Binance Case Exit
The SEC’s decision to seek dismissal of its case against Binance marks one of several recent instances in which the agency has opted to scale back or withdraw legal actions against major players in the cryptocurrency sector.
In early May, the SEC reached a settlement agreement with Ripple Labs, along with CEO Brad Garlinghouse and co-founder Christian A. Larsen. As part of the agreement, both parties plan to submit a joint request to the district court, seeking a preliminary ruling that may lead to the removal of the existing injunction against Ripple.
The settlement also outlines the handling of the $125,035,150 civil penalty currently held in escrow. Under the agreement, $50 million will be paid to the SEC to resolve the penalty in full, while the remaining funds are set to be returned to Ripple.
Should the district court indicate support for lifting the injunction and releasing the escrowed funds in line with the settlement terms, both the SEC and Ripple intend to request a limited remand to allow the lower court to issue the necessary relief.
If approved, the parties plan to withdraw their pending appeals currently under review by the U.S. Court of Appeals for the Second Circuit.
This ongoing trend from the Commission suggests a possible shift in enforcement strategy as the SEC reevaluates its approach to regulating digital asset markets amid evolving legal interpretations and industry developments.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the shiba inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
