Two-Year Legal Battle Comes to an End
The U.S. Securities and Exchange Commission (SEC) is officially ending its high-profile lawsuit against Binance, one of the world’s largest cryptocurrency exchanges. This marks a significant retreat in the agency’s aggressive crypto enforcement strategy over the past few years.
On May 29, the SEC, Binance, and its co-founder Changpeng Zhao (CZ) filed a joint motion in a Washington, D.C. federal court requesting dismissal of the lawsuit initially filed in June 2023. The motion seeks dismissal with prejudice, meaning the case cannot be brought back in the future.
Crypto Task Force Cited in Dismissal
The joint filing noted that developments in the SEC’s Crypto Asset and Cyber Unit could “impact and facilitate the potential resolution of this litigation.” The agency added that dismissing the case was the right decision “as a policy matter and in the exercise of its discretion.”
Background: SEC Allegations Against Binance
The SEC originally sued Binance, Zhao, and the exchange’s U.S. entity BAM Trading, accusing them of violating federal securities laws, mishandling user funds, and misleading investors.
However, signs of a pullback began earlier in 2024, with case pauses in February and April. These delays indicated the SEC’s crypto division was reconsidering the merits of continuing legal action.
Zhao’s DOJ Plea and Binance Settlement
In a separate case with the U.S. Department of Justice (DOJ), Binance agreed in November 2023 to pay a $4.3 billion penalty. Zhao admitted to violating Anti-Money Laundering laws and stepped down as CEO. He pleaded guilty to money laundering charges and was sentenced to four months in prison in April 2024.
Industry Celebrates as Crypto Sentiment Shifts
Following the dismissal motion, Binance posted on X (formerly Twitter) calling the move a “huge win for crypto.” The company credited former President Donald Trump and SEC Chairman Paul Atkins for “pushing back against regulation by enforcement.”
SEC Retreats from Crypto Enforcement Under New Leadership
The decision reflects a broader regulatory shift under the Trump administration. Since Trump reappointed Paul Atkins, a known crypto advocate and former blockchain lobbyist, the SEC has dropped or settled several crypto lawsuits.
Recent examples include softened stances or closed cases involving Coinbase, Kraken, ConsenSys, Circle, Immutable, and OpenSea. The SEC is now working toward building a clearer digital asset framework through industry roundtables and updated guidance.
