Binance, US regulators seek legal pause as Trump’s crypto agenda unfolds

Binance and the US Securities and Exchange Commission (SEC) have jointly requested a federal judge to pause the regulator's ongoing lawsuit against the crypto exchange, citing the potential impact of a newly formed task force focused on digital asset regulation.

The motion signals a possible shift in the SEC's enforcement approach toward crypto under President Donald Trump's administration.

A 60-day stay: a sign of change in the air?

The motion to request a stay for 60 days marks the first clear effort to retreat from the SEC's previous crypto enforcement under Democratic leadership.

In a joint motion filed late Monday, the parties said the SEC's task force, formed last month to work on crypto regulations, may "impact and facilitate the potential resolution of this case".

The stay has been interpreted by some as an early indication of the SEC's move toward a more crypto-friendly stance, aligning with President Trump's stated goal of making the US a global hub for the cryptocurrency industry.

Reuters previously reported the SEC, under Republican leadership, was expected to begin a review of existing court cases like those against Binance, where the regulator has argued the firms are listing crypto tokens that behave like securities.

A spokesperson for the agency declined to comment beyond the court filing, maintaining a cautious public posture.

Commissioner Hester Peirce hints at policy shift

At a Federalist Society event on Tuesday, Republican Commissioner Hester Peirce offered a glimpse into the agency's evolving perspective: "We've been approaching it backwards, using our enforcement division to set policy," she stated, suggesting a move toward a more proactive and comprehensive regulatory framework.

The Binance lawsuit

The SEC initially sued Binance, its US unit, and founder Changpeng Zhao in June 2023, accusing them of artificially inflating trading volumes, diverting customer funds, and misleading investors about its market surveillance controls.

"The SEC's case has always been without merit and we are eager to put this behind us and to continue our focus on keeping Binance the most secure, licensed and trusted exchange in the world," said a spokesperson for Binance, while thanking acting SEC Chair Mark Uyeda.

The motion to stay the case drew criticism from former SEC official Corey Frayer, who expressed concern about the implications for investor protection.

"Delaying a case where the CEO pled guilty to criminal charges and the SEC has an employee dead to rights admitting violation of the securities laws clarifies the SEC's shifts on crypto may culminate in a full dereliction of duty," he told Reuters.