SEC Hester Peirce reveals why case against Binance was dropped

Days after the U.S. Securities and Exchange Commission (SEC) dropped a significant lawsuit against Binance, world’s largest cryptocurrency exchange, the SEC commissioner Hester Peirce spilled beans regarding what made the commission look the other way in this case, but at the same time, insisting that it doesn’t give a free pass to “rip people off” in the name of crypto.

In an interview with the CNBC, Commissioner Peirce spoke on a range of issues related to the crypto industry and the U.S. SEC, focussing on the imminent need to introduce a clear regulatory framework. Peirce, who was appointed as the SEC commissioner under the President Trump administration this year, made it clear that her number one agenda is to bring clarity between SEC and crypto businesses in the U.S.

When asked about what made the SEC dropped its latest lawsuit against Binance, Peirce said that the agency had to take a “step back” to understand the regulatory structure in the first place. The case against Binance by the SEC dates back to June 2023 when the agency had claimed that the exchange had diverted customer assets, inflated trading volume and granted U.S. investors access to its unregistered international platform.

“What we are trying to do with these enforcement cases is to look at them with facts and circumstances basis. And like I previously said we didn’t really have a clear set of rules. There were a lot of questions about how these particular crypto activities intersected with our set of existing securities laws. So we are trying to take a step back, use our regulatory tools, to write those rules and then enforce those rules,” said Peirce.

Meanwhile, Hester Peirce, as part of crypto task force also gave a warning that the Binance lawsuit case shouldn’t be set as a precedent for other crypto businesses to get a “free pass”.

“Now, I think it’s really important to underscore that it is not the time for people to think I have a free pass to go rip people off in the name of crypto. We the SEC might not have authority over everything but there are other federal agencies who would really like to use our tools to go after people who rip off in the name of crypto,” added Peirce.

During the interview with CNBC, Peirce also opened up about her priority to get a clear regulatory structure for crypto with the SEC.

“For many years, I have been blaming about how SEC has not taken pro-active steps to provide clarity and finally we are at a place to do that, and to actually see that happening and getting to know people in and out of the commission, who are working towards the same goal of providing clarity, it has been very rewarding,” said Peirce.

The commissioner also added that her focus is to bring along all parties on the table and set a common ground for rule making in crypto.

“People are asking for clarity and when you cross them, they don’t all agree, here’s going to be difference of opinion on how to get to the right place and we have to sort through those views, we have to try to set crypto in the precedent legal that we have as we have any their security issue,” said Peirce.