SEC, Binance Jointly Seek 60-Day Pause In Gensler-Era Lawsuit; $XRP Army Demands Action For Ripple

The U.S. Securities and Exchange Commission (SEC) has filed a motion to temporarily pause the regulator's lawsuit against crypto exchange giant Binance, marking a significant shift in the agency's approach toward Gensler-era complaints against cryptocurrency firms.

The move has sparked conversations across crypto communities over how it might impact other lawsuits filed by the SEC against crypto and blockchain firms, and how it can affect other similar cases.

SEC, Binance file joint motion to stay the case

In a joint motion filed this week, the Wall Street regulator and Binance sought to stay the case for 60 days, with the reasoning that the change in leadership at the SEC may have an impact on the case.

"On January 21, 2025, new SEC Acting Chairman Mark T. Uyeda launched a crypto task force dedicated to helping the SEC develop a regulatory framework for crypto assets. The work of this task force may impact and facilitate the potential resolution of this case," the motion stated.

It argues further that "there is no prejudice to any party" as it is a joint motion and a stay can save both parties' resources, especially if an early resolution is achieved.

What happens next?

According to the motion, the parties propose that they be required to submit a joint status report following the 60-day stay period to determine whether it's necessary to file for another pause.

Based on the language used in the joint motion, it appears both parties want to resolve the matter soon.

"Further, this brief stay will promote the efficient use of the Court's resources, as a resolution would obviate the need for the Court to resolve Defendants' pending Motions to Dismiss the Amended Complaint," the motion added.

Why it matters to the crypto industry

The joint motion to pause the case was the first of its kind since former SEC Chair Gary Gensler stepped down and Uyeda was designated as the Acting Chair pending Congress confirmation of nominee Paul Atkins.

Uyeda has made significant changes around the SEC since taking up the chair position.

Aside from establishing a task force led by "Crypto Mom" Commissioner Hester Peirce, he also led efforts against the controversial SAB 121 accounting bulletin, leading to the bulletin being rescinded.

Under Gensler's watch, the SEC sued Binance and its co-founder Changpeng "CZ" Zhao in mid-2023, alleging they violated U.S. securities laws and put investors' funds at risk by not establishing the proper consumer protection systems for the exchange.

Later that year, Zhao stepped down and pleaded guilty to several charges, including money laundering, following which he served four months in prison and was released in September.

A joint motion could indicate that the new SEC is willing to coordinate and discuss its issues with crypto operations with companies and is potentially avoiding an enforcement-first approach.

The crypto industry was tuned in to the case, considering Binance's status as a key player in the crypto space and Zhao's popularity in the community.

This time, the crypto space was also watching the development, especially communities that felt attacked by the Gensler SEC's aggressive approach toward regulating crypto.

$XRP army demands action in Ripple case

As news of the motion spread across "Crypto Twitter," XRP holders, often called the XRP Army, demanded a similar approach or a total dismissal in the case.

Others said the case against Ripple, which was also accused of violating securities laws late in 2020, should have been resolved first before the lawsuit on Binance. Some said they wouldn't want a delay in the Ripple case and would prefer the case be dropped completely.

Meanwhile, several argued that XRP holders were the ones who "got hurt" by the SEC's lawsuit against Ripple, the largest known corporate holder of the XRP token.

Amid increasing calls for the new SEC to take note of the Ripple lawsuit, some crypto holders believe the Binance-SEC joint motion "hints at a strategic pivot," and could lead to a turning point in crypto regulation.

Another case the crypto community has its eyes on following the joint motion is the SEC's lawsuit against Coinbase, another crypto exchange titan. Coinbase has repeatedly accused the Gensler SEC of regulatory overreach and, like Ripple, had been fighting the lawsuit, unlike Binance, which paid a hefty sum for its supposed violations.