The U.S. Securities and Exchange Commission (SEC) has officially withdrawn its lawsuit against the cryptocurrency exchange Binance and its co-founder Changpeng Zhao. The motion, filed in federal court in Washington on May 29, calls for the case to be dismissed with prejudice, meaning it cannot be reopened in the future.
The lawsuit, originally filed in June 2023, alleged violations of securities laws, mishandling of customer funds, and misleading users. The SEC also included Binance’s U.S. affiliate, BAM Trading, in the proceedings.
Joint Resolution by the Parties
According to the court filing, the dismissal was initiated by the SEC “under the agency’s discretionary authority and in consideration of the political environment.” It also noted that the SEC’s internal crypto task force may facilitate a final resolution of the conflict.
The case has been dismissed “with prejudice,” which prevents the SEC from filing the same charges again. The proceedings had already been paused in February and April, pending further actions by the agency.
Background of the Dispute
In addition to the SEC lawsuit, Binance and Zhao settled separate charges brought by the U.S. Department of Justice in November 2023. Under the settlement, the company agreed to pay a $4.3 billion fine and admitted to:
- Violating sanctions regulations.
- Operating without a license for cross-border transfers.
- Insufficient anti-money laundering measures.
Zhao stepped down as CEO of Binance and pleaded guilty to money laundering charges. In April 2024, he was sentenced to four months in prison.
SEC Policy Shift
The decision to withdraw the lawsuit aligns with a broader shift in policy: under the administration of Donald Trump, the SEC is winding down several cases initiated during Joe Biden’s presidency. The SEC had previously dropped claims against Ripple, Consensys, and Kraken, and ended investigations into Circle, Immutable, and OpenSea.
SEC Chairman Paul Atkins, appointed by Trump and formerly a cryptocurrency lobbyist, announced plans to establish a regulatory framework for digital assets. The regulator has also launched a series of industry meetings to discuss future policy directions.
Market and Industry Reactions
Binance called the joint motion “a huge win for the sector.” In a post on X, the company thanked Trump and Atkins “for pushing back against regulation by enforcement.”
Changpeng Zhao responded with a post reading “crypto is still here,” directed at former SEC Chairman Gary Gensler, who had initiated the original lawsuit.
