In a surprise shift, the United States Securities and Exchange Commission (SEC) has decided to withdraw its lawsuit against Binance, marking one of its most significant retreats from crypto enforcement yet. The case, originally filed in June 2023, had accused Binance, its co-founder Changpeng Zhao, and its U.S. affiliate BAM Trading of securities violations, mishandling of client funds, and misleading users.
On May 29, all parties involved—including Binance and Zhao—filed a joint motion in a Washington, D.C. federal court requesting the dismissal of the suit “with prejudice,” which means the SEC cannot revive the case in the future. The filing cited internal developments within the SEC’s Crypto Task Force that may have influenced the decision to step back. It stated that dropping the action was appropriate “in the exercise of its discretion and as a policy matter.”
This decision follows two earlier pauses in February and April 2024, as the SEC reconsidered its approach to digital assets regulation. The lawsuit was part of a broader crackdown under the Biden administration—an approach that appears to be softening under Donald Trump’s current term.
Crypto Regulation Sees a Major Shift
The end of the SEC-Binance legal clash is being seen as a turning point for the crypto industry in the United States. Binance hailed the motion as a “huge win for crypto,” publicly thanking President Donald Trump and new SEC Chair Paul Atkins for resisting what they called “regulation by enforcement.”
This is not the first time the SEC has backed away from a crypto confrontation in recent months. The agency has also settled or dropped actions against major players such as Coinbase, ConsenSys, and Kraken. Investigations into other big names—like Circle, Immutable, and OpenSea—have quietly ended as well.
Atkins, a former crypto lobbyist now heading the SEC, has signalled a more collaborative direction. He has proposed the development of a structured framework for digital assets and announced roundtables with industry leaders to inform policy discussions.
The policy reset comes after Binance and Zhao agreed to pay a $4.3 billion penalty in a separate case with the Department of Justice in November 2023. As part of that deal, Zhao stepped down as CEO and admitted to breaching U.S. anti-money laundering rules. In April 2024, he received a four-month prison sentence for related charges.
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