The Securities and Exchange Commission has officially dismissed its lawsuit against cryptocurrency exchange Binance, ending one of the agency's most prominent enforcement actions in the digital asset sector. The dismissal follows a joint motion filed May 29 by the SEC, Binance, and former CEO Changpeng Zhao in federal court in Washington, D.C.
What to Know:
- The SEC's June 2023 lawsuit accused Binance of securities violations and mishandling customer funds
- The case was dismissed with prejudice, preventing it from being reopened in the future
- The dismissal represents part of a broader shift in SEC crypto enforcement under the Trump administration
Binance Declares Victory as Legal Battle Ends
"Huge win for crypto today. The SEC's case against us is dismissed," Binance announced in a May 30 social media post. The exchange thanked SEC Chairman Paul Atkins and President Trump's administration "for pushing back against regulation by enforcement." The company added that "U.S. innovation is back on track – and it's just the beginning."
The regulator stated that dropping the case was appropriate "in the exercise of its discretion and as a policy matter." Officials clarified the decision does not reflect the agency's position on other cryptocurrency-related litigation. The lawsuit was dissolved with prejudice, meaning it cannot be reopened.
The case had been paused twice this year, in February and April. The SEC's Crypto Task Force, established under Acting Chair Mark T. Uyeda, influenced the decision to proceed with dismissal.
The financial watchdog originally sued Binance, Zhao, and the exchange's U.S. arm in June 2023. The complaint accused them of violating securities laws by offering unregistered securities to American investors. It also alleged mishandling of customer funds and misleading investors about financial controls.
Regulatory Shift Under New Leadership
The SEC has reversed its crypto enforcement approach under President Trump's second term. This dismissal represents the latest in a series of abandoned enforcement actions against major cryptocurrency firms.
The agency previously dropped or settled complaints against Coinbase, Ripple, and Kraken in recent months. It also closed investigations into Robinhood Crypto, Uniswap Labs, and OpenSea. These moves signal a dramatic departure from the previous administration's aggressive enforcement strategy.
Paul Atkins assumed the SEC chairmanship with a pro-cryptocurrency stance and commitment to establishing clear digital asset frameworks. Under his leadership alongside Uyeda, the regulator has conducted multiple roundtables focused on crypto regulation and financial innovation. Commissioner Hester Peirce has played a central role in these policy discussions.
The Binance case represented the last major regulatory challenge facing the exchange following its $4.3 billion settlement with the U.S. government last year. As part of that agreement, Zhao pleaded guilty to anti-money laundering violations and resigned as chief executive.
Closing Thoughts
The SEC's dismissal of the Binance lawsuit marks a significant shift in federal cryptocurrency oversight under the Trump administration. This development, combined with similar case dismissals, suggests a more collaborative approach between regulators and the digital asset industry moving forward.