United States Securities and Exchange Commission (SEC) has officially dropped its long-running lawsuit against crypto exchange Binance, marking a significant retreat from its previous enforcement actions in the digital asset space.
A joint motion filed on May 29 by the SEC, Binance, and its co-founder, Changpeng Zhao, requested that a Washington, D.C. federal court dismiss the complaint initially filed in June 2023. The motion emphasized the SEC’s reconsideration of its stance on crypto regulation and cited its Crypto Task Force as a factor in facilitating a resolution.
The lawsuit, which accused Binance and Zhao of violating securities laws, mishandling customer funds, and misleading investors, had been paused earlier in February and again in April, leading to speculation that the SEC might eventually withdraw the case.
Binance and Zhao had previously settled a separate lawsuit with the U.S. Department of Justice in November 2023, agreeing to pay a $4.3 billion fine. As part of the settlement, Zhao stepped down as CEO and pleaded guilty to money laundering charges, later receiving a four-month prison sentence.
Following the SEC’s decision to drop the lawsuit, Binance hailed the move as a “huge win for crypto” on social media, expressing gratitude to President Donald Trump and SEC Chairman Paul Atkins for resisting “regulation by enforcement.”
SEC Softens Crypto Crackdown Under Trump Administration
The SEC’s withdrawal from the Binance lawsuit signals a broader shift in its approach to crypto regulation. Under the Trump administration, the agency has abandoned or settled multiple enforcement actions against major crypto firms, including Coinbase, Kraken, and Consensys.
The SEC has also ceased investigations into other industry players such as Circle, Immutable, and OpenSea. This pivot follows Trump’s appointment of former crypto lobbyist Paul Atkins as SEC Chair, with Atkins pledging to establish a comprehensive regulatory framework for digital assets.
As part of its new approach, the SEC has initiated roundtable discussions with industry stakeholders to shape future crypto policies.
