The U.S. Securities and Exchange Commission (SEC) and cryptocurrency exchange Binance have requested a U.S. federal judge for an additional two-month delay in their nearly two-year legal fight.

“Since the Court stayed this case, the Parties have been in productive discussions, including discussions concerning how the efforts of the crypto task force may impact the SEC’s claims,” both parties said in an April 11 joint status report.

SEC Requests Binance to Agree to the Delay

According to the filing, SEC requested Binance to accept this delay request, and Binance agreed to the additional 60-day delay. The regulator continues to seek permission to “approve any resolution or changes to the scope of this litigation.”

“The Defendants agreed that continuing the stay is appropriate and in the interest of judicial economy,” the filing stated.

This request came shortly after SEC dropped a series of lawsuits against cryptocurrency exchanges Coinbase, Kraken, and Gemini, as well as against Robinhood and Consenys.

At the end of the 60-day period, SEC and Binance plan to submit another joint status report. This marks the second 60-day pause SEC and Binance have requested this year, following a previous extension granted by the judge on February 11.

The February request came just days after crypto-skeptic Gary Gensler stepped down as SEC chairman on January 20, with crypto-friendly SEC commissioner Mark Uyeda taking over as acting chair.

At the time, SEC and Binance also cited the establishment of SEC’s Crypto Task Force as a reason for the pause.

Formed immediately after Gensler resigned on January 21, the task force said its goal is to “help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”

The legal battle between SEC and Binance has dragged on for almost two years. It began in June 2023 when the agency filed a lawsuit against Binance, its U.S. platform, and CEO Changpeng “CZ” Zhao.

The U.S. regulator pressed 13 charges against Binance, including unregistered offers and sales of the BNB and Binance USD tokens, the Simple Earn and BNB Vault products, and its staking program.

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The Need for a Tailored Registration Form

The registration statement from the SEC that American issuers have to submit before launching a new securities product is known as an S-1 form. It covers several disclosures, including a statement of cash flows and an income statement.

Uyeda showed how some financial products may not be suitable for the SEC’s conventional registration form using registered index-linked annuities. The SEC develops customized registration criteria by working with product sponsors, he added.

“Well, why shouldn’t we treat crypto and digital asset securities the same way?” Uyeda remarked. “We have the flexibility to do that; that was in part expressing my frustration in that we have not done more of that to accommodate sponsors of these types of digital assets that they have concluded as securities.”

Addressing the SEC’s “Catch-22” Situation

According to Uyeda, the agency lacks capacity to establish a “catch-22 situation” when the SEC requests digital asset securities sponsors to register and furnish irrelevant or unable disclosures.

Still, Uyeda said such registrations follow the examination of the issuer and the choice to consider their product as a security under federal laws. Although digital asset-based securities like tokenized bonds or cryptocurrency exchange-traded funds come under SEC control, it is yet unknown if cryptocurrencies qualify as securities.

“The word ‘crypto asset security’ is a made-up term with no legal basis; none of the legislation refers to it. The SEC has to quit trying to fool judges with it,” Chief Legal Officer Stuart Alderoty of Ripple stated on X yesterday.

Regulatory Uncertainty and Future Considerations

Legal conflicts with ripple about classifying some digital assets as securities have been involving the SEC. Along with many other businesses, including Coinbase, Ripple said that the SEC lacked enough regulatory certainty.

Uyeda said the SEC should define what securities are and are not in digital assets when questioned about his disagreement with the SEC’s decision to refuse Coinbase’s rulemaking petition.

“I hope at some point, whether it’s Gensler or any of his successors, will think about it; we’ve now had a fair amount of regulatory uncertainty on digital assets; maybe we ought to move forward with some legislation or rulemaking,” Uyeda remarked.

Digital assets are not among the more than fifty issues SEC chairman Gary Gensler had on the regulatory agenda during his term, nevertheless. Uyeda also mentioned that Gensler has last authority on adding fresh issues to the regulatory agenda.

Uyeda said the SEC should take future rulemaking on digital assets into account countries all around, including the EU, South Korea, and Japan.

One of the five commissioners of the SEC, Uyeda, has a set tenure until June 2028 and said that his opinions are personal and do not represent the whole agency.

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