SEC Drops Lawsuit Against Crypto Giant Binance

The SEC has dropped its lawsuit against Binance and its founder Changpeng Zhao, marking a shift in the agency’s approach to regulating the cryptocurrency industry. The motion to dismiss, filed jointly with Binance, indicates that the complaint cannot be refiled. This move follows a series of settlements and dropped cases against multiple crypto firms, coinciding with the SEC’s leadership changes under President Trump.

In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has decided to drop its long-standing lawsuit against Binance, one of the largest cryptocurrency exchanges globally. The lawsuit, initially filed in June 2023, accused Binance, its co-founder Changpeng Zhao, and its U.S.-based affiliate BAM Trading of violating securities laws, mishandling customer funds, and misleading clients.
The motion to dismiss, submitted on May 29, asked a federal court in Washington, D.C. for a joint agreement between the SEC and Binance to drop the complaint with prejudice. This means that the case cannot be refiled, marking a significant retreat from the SEC’s earlier stringent regulatory approach.
Commenting on the motion, the SEC suggested that its newly formed Crypto Task Force might influence a favourable resolution for Binance, noting that rescinding the lawsuit was within its discretion as a policy matter. This further signals the SEC’s evolving stance toward crypto regulation under the current administration.
Interestingly, the SEC had previously paused legal actions against Binance in both February and April, during which time there were indications that its crypto unit was considering dropping the case altogether. It’s worth mentioning that Binance settled a separate case with the Department of Justice (DOJ) in November 2023, which involved a hefty $4.3 billion fine for violating sanctions and operating as an unlicensed money transmitter.
As part of that DOJ settlement, Zhao resigned as CEO of Binance and pleaded guilty to a money laundering charge, subsequently receiving a four-month prison sentence in April 2024. In a statement on social media platform X, Binance celebrated the joint motion as a “huge win for crypto” while thanking President Donald Trump and SEC chair Paul Atkins for their influence on easing regulatory pressure.
This recent development fits into a wider pattern, as the SEC appears to be stepping back from its rigorous stance on cryptocurrency enforcement, especially following changes in leadership. Under Trump’s influence, Atkins, a former crypto lobbyist, is seeking to establish a clearer regulatory framework for digital assets, including holding discussions with industry representatives through several roundtables.