The US Securities and Exchange Commission requested more time to respond to a motion to dismiss one of the agency’s crypto enforcement cases, citing how its recently created crypto task force could affect its approach in court.
In a Feb. 10 filing in the US District Court for the Northern District of Illinois, the SEC requested a judge push its deadline to respond to Cumberland DRW’s motion to dismiss from Feb. 19 to March 21. According to the financial regulator, its crypto task force “may affect and could facilitate the potential resolution of [the] case.”
“[...] the SEC believes that an enlargement of time is appropriate and will allow the parties to explore a potential resolution of this matter while conserving judicial resources,” said the commission.
The wording of the SEC’s request mirrored that of a Feb. 10 motion in its enforcement case against Binance. In that filing, the SEC and exchange requested a judge pause the case for 60 days, also citing the crypto task force’s work in developing a regulatory framework.
SEC motions in cases against Binance (left) and Cumberland (right), filed on Feb. 10. Source: PACER
The SEC filed an enforcement action against Cumberland in October 2024, alleging the firm sold roughly $2 billion in crypto while operating as an unregistered dealer. In a Feb. 11 order, Judge Matthew Kennelly granted the SEC’s motion for a 30-day delay but said the commission “should not expect a further extension.”
Shift in priorities under new SEC leadership?
It’s unclear whether the SEC will use the same delay tactic in all its crypto enforcement cases currently moving through US courts, including those against Coinbase, Kraken and Ripple Labs. The commission’s civil case against Coinbase has been stayed pending a decision in the appellate court, while Ripple and the SEC have both appealed a $125-million judgment imposed by a judge in August 2024.
“It’s clear that the SEC is going to completely shift its enforcement activities as to crypto, and it makes sense that they would pause ongoing major actions like Binance while they await guidance from the SEC’s crypto task force,” Mark Bini, a former Assistant US Attorney for the Eastern District of New York, told Cointelegraph. “If the SEC now views most crypto as not being a security, those actions may be terminated entirely.”
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The regulator’s public statements concerning digital assets under the leadership of Acting Chair Mark Uyeda could also affect criminal cases involving allegations of violations of securities laws.
On Feb. 5, former SafeMoon CEO Braden John Karony asked a federal judge to push jury selection for his upcoming criminal trial by 30 days, citing “significant changes” in the SEC’s proposed crypto policies. Karony’s legal team included a statement from SEC Commissioner Hester Peirce suggesting the regulator would consider “retroactive relief” for some crypto cases.
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