SEC discontinues proceedings against Binance

Binance no longer has to fear any further action from the US Securities and Exchange Commission: The Securities and Exchange Commission (SEC) has now declared proceedings against the well-known crypto exchange to be over. This is a positive turn of events for Binance CEO Changpeng Zhao, who has already served time in prison. Binance is the next major provider to benefit from the Trump administration's crypto-friendly course.

As the SEC announced on Thursday, it has reached an agreement with Binance lawyers. Both sides signed a declaration, according to which the SEC will voluntarily refrain from taking further action against Binance.

Various allegations in the room

The SEC had sued Binance and Zhao in June 2023. It was alleged that Binance had artificially inflated trading volumes and diverted client funds. The SEC had also accused Binance of using monitoring mechanisms that were misleading for investors.

Binance had also been accused of facilitating unlawful trading in several cryptocurrency tokens that the SEC believed should have been registered as securities. This was during the term of office of former US President Joe Biden, whose administration took a much stricter stance on cryptocurrencies than his successor Donald Trump. At the beginning of May, he caused a stir when his family invested billions in Binance.

The proceedings have now been discontinued, which means that the SEC cannot become active again in this specific case. The authority sees this as an appropriate step within the scope of its own discretionary powers and refers to it as a matter of principle. However, it does not reflect its view on other proceedings in the cryptocurrency sector.

A Binance spokesperson welcomed the end of the proceedings. "We are very grateful to SEC Chairman Paul Atkins and the Trump administration for recognizing that innovation cannot thrive under regulation through enforcement", he told Reuters.

Zhao was already in custody

Another SEC case against Binance has already ended in prison for Zhang. He had pleaded guilty in November 2023 to violating federal anti-money laundering laws through deficiencies in internal controls. He was sentenced to a fine of 4.32 billion dollars and also served a four-month prison sentence. Furthermore, he has been free again since last September.

After Coinbase, Binance is the next corresponding provider to benefit from President Trump's crypto-friendly stance. The Coinbase proceedings ended back in March with an agreement, the details of which are not known. Even before the SEC made this official, Coinbase CEO Brian Armstrong announced that the company would not have to endure any fines or changes to its business –, which the SEC also confirmed a week later.

For Trump himself, the players in the crypto industry also turned from Saul to Paul: while he himself described cryptocurrencies as a "scam" during his first term in office, he launched his cryptocurrency shortly before his second term. An important paradigm shift that gave the industry a boost; Coinbase, for example, made it into the renowned S&P 500 share index after a recent high in the price of Bitcoin.

(nen)