- The SEC drops lawsuit against Binance and CZ, marking a major win for the crypto exchange.
- The case dismissal is with prejudice, preventing the SEC from refiling charges against Binance.
- Binance praised Trump and SEC Chair Atkins for opposing regulation by enforcement in crypto.
The U.S. Securities and Exchange Commission has officially dropped its lawsuit against Binance, closing a major chapter in crypto regulation. The dismissal came through a joint motion filed by the SEC, Binance, and founder Changpeng Zhao on May 29 in a Washington, D.C. federal court.
The case began in June 2023 when the SEC accused Binance of multiple violations. These included inflating trading volumes, misusing customer funds, and listing unregistered securities. The agency also claimed Binance misled investors about its internal compliance systems.
Binance’s U.S. entity, BAM Trading, was also named in the case. Zhao, who previously served a short prison sentence for anti-money laundering violations, was a central figure. The enforcement pause in February and April signaled a shift. Now, the court filing requests dismissal “with prejudice,” meaning the SEC cannot reopen the case.
In a statement, Binance called it a landmark moment for the industry. The company expressed gratitude to SEC Chair Paul Atkins and President Donald Trump. Binance said it believed innovation had suffered under “regulation by enforcement,” but now sees this as a turning point, stating that “U.S. innovation is back on track.”
The SEC explained that dropping the case was a policy decision. The agency emphasized the move did not affect other ongoing crypto investigations, and the spokesperson declined to provide additional comments beyond the filing.
Under the Trump administration, the SEC has shown a different approach to crypto. The shift includes pausing or withdrawing other enforcement actions. In February, the SEC also dropped a case against Coinbase involving unregistered token sales.
Chairman Paul Atkins has spoken publicly about creating clear crypto rules. On May 12, he said the SEC would focus on transparency and investor protection without stifling innovation. He added that enforcing the law while building fair frameworks was a top goal.
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The dismissed Binance case was separate from the criminal charges resolved in 2023. Then, Binance pleaded guilty to federal violations and paid a $4.32 billion penalty. Zhao served a four-month sentence for failing to maintain proper compliance systems.
The SEC’s Crypto Task Force may continue to influence future regulation. The task force has played a central role in evaluating policy shifts under the Trump administration. It remains unclear how other pending crypto cases will proceed.
