SEC Drops Lawsuit Against Binance, Signaling Major Shift in Crypto Regulation
The U.S. Securities and Exchange Commission (SEC) has officially moved to dismiss its high-profile lawsuit against crypto exchange Binance and its co-founder Changpeng “CZ” Zhao, marking a significant retreat from the agency’s prior enforcement-heavy stance on crypto.
Joint Motion Filed to Dismiss Case
On May 29, the SEC, Binance, and Zhao filed a joint motion in a Washington, D.C. federal court requesting the dismissal of the SEC’s June 2023 lawsuit, which had accused Binance of violating securities laws, mishandling customer funds, and misleading users.
The filing stated that the SEC’s Crypto Task Force may soon help “facilitate the potential resolution of this litigation” and emphasized that the agency now considers dismissing the case to be the proper move “in the exercise of its discretion and as a policy matter.”
Importantly, the request to dismiss the case “with prejudice” means the SEC will be barred from refiling the lawsuit in the future.
Background and Broader Context
The SEC’s case against Binance had been on hold since February 2024, with additional delays in April, amid growing speculation that the regulator was softening its approach toward the crypto sector under President Donald Trump’s administration.
Binance and Zhao had previously reached a separate $4.3 billion settlement with the U.S. Department of Justice in November 2023, over sanctions violations and anti-money laundering failures. As part of that deal, Zhao stepped down as CEO and later received a four-month prison sentence in April 2024.
Binance Hails “Huge Win for Crypto”
Following the motion, Binance posted on X (formerly Twitter), calling the dismissal a “huge win for crypto” and thanked President Trump and SEC Chair Paul Atkins for “pushing back against regulation by enforcement.”
Broader Shift at the SEC
The move marks the latest rollback of aggressive crypto enforcement actions initiated under former SEC Chair Gary Gensler during the Biden administration. Since Trump’s return to office in January 2025, the SEC has:
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Dropped or settled cases against Coinbase, Kraken, and ConsenSys.
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Closed investigations into firms including Circle, Immutable, and OpenSea.
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Launched industry roundtables to discuss future crypto regulation.
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Appointed Paul Atkins, a former crypto policy advocate, as SEC chair.
Atkins has pledged to develop a new digital asset framework that emphasizes regulatory clarity and collaboration over litigation.
The dismissal of the Binance lawsuit signals a dramatic shift in how the U.S. plans to regulate digital assets, moving away from a confrontational model toward a more cooperative and industry-driven approach.
