SEC Drops Lawsuit Against Binance in Major Crypto Enforcement Shift

The U.S. Securities and Exchange Commission (SEC) has decided to drop its big lawsuit against Binance, the world‘s top cryptocurrency exchange, and its former boss, Changpeng Zhao. Papers filed Thursday in a Washington, D.C. court show both the SEC and Binance asked to end the case started in June 2023. The lawsuit, which also targeted Binance’s U.S. partner, BAM Trading, claimed the exchange broke rules.

The SEC said ending the case makes sense, pointing to its new Crypto Task Force as a way to settle this and other similar disputes. This move follows earlier hints of backing off, as both sides asked to pause the case in February and April. The decision suggests the SEC might be easing up on its tough stance against crypto, which got stronger in 2023.

Binance isnt the only company getting a break. Earlier this year, Ripple Labs and Kraken worked out deals with the SEC, and probes into firms like Consensys, Circle, and Immutable have wrapped up. This change comes as people pay more attention to crypto projects linked to big names, especially former President Donald Trump.

House Democrats, like Reps. Gerald Connolly, Jamie Raskin, and Joe Morelle, recently pushed the U.S. Treasury‘s Financial Crimes Enforcement Network (FinCEN) to share reports about suspicious activities tied to Trump-related crypto efforts, such as World Liberty Financial (WLF) and the $TRUMP memecoin. They’re worried about a $75 million investment by crypto businessman Justin Sun, including $45 million spent on WLF tokens in January. Around that time, the SEC also paused its case against Sun, which has people wondering about the timing.

There‘s also a $2 billion deal between Binance and a company from Abu Dhabi called MGX, which plans to use WLF’s USD1 stablecoin for the deal. Senate Democrats have raised concerns that Binances links to Trump projects could involve improper influence or foreign lobbying.

The SECs choice to end the Binance lawsuit is a big deal for the crypto world. It might mean regulators are ready to work more closely with the industry. Still, the mix of crypto and political power is causing debates, with lawmakers calling for clearer answers.

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