In a landmark decision reflecting a significant shift in U.S. regulatory policy, the Securities and Exchange Commission (SEC) has officially dismissed its lawsuit against Binance, the world’s largest cryptocurrency exchange, and its founder, Changpeng Zhao (CZ). This move marks a departure from the SEC’s previous aggressive enforcement stance and signals a new era of crypto regulation under the Trump administration.
Background: The SEC’s Case Against Binance
In June 2023, the SEC filed a lawsuit against Binance, its U.S.-based arm BAM Trading, and CZ, alleging multiple violations of securities laws. The charges included operating unregistered securities exchanges, misrepresenting trading controls, and commingling customer funds with company assets. The SEC claimed that Binance allowed U.S. customers to trade on its platform despite regulatory restrictions and that it failed to implement adequate anti-money laundering measures.
These allegations were part of a broader crackdown on the cryptocurrency industry during the Biden administration, which saw increased scrutiny and enforcement actions against major crypto firms.
The Dismissal: A Joint Motion
On May 29, 2025, the SEC and Binance filed a joint motion to dismiss the lawsuit with prejudice, meaning the case cannot be refiled. The motion cited the SEC’s evolving approach to cryptocurrency regulation and the establishment of a new Crypto Task Force aimed at developing a dedicated regulatory framework for digital assets. The SEC stated that dismissing the case was appropriate “in the exercise of its discretion and as a policy matter.”
This decision follows a series of pauses in the legal proceedings earlier in the year, indicating ongoing negotiations and a potential shift in regulatory priorities.
Political Influence and Regulatory Shift
The dismissal aligns with the Trump administration’s more industry-friendly stance toward cryptocurrency regulation. Under President Trump’s leadership, the SEC has seen a change in direction, moving away from enforcement-driven actions toward collaborative policy development. The appointment of Paul Atkins, a known crypto advocate, as SEC Chairman underscores this shift.
The administration’s approach aims to foster innovation in the crypto sector while establishing clear regulatory guidelines. This contrasts with the previous administration’s focus on strict enforcement and has been welcomed by many in the crypto industry.
Binance’s Legal Challenges and Settlements
While the SEC lawsuit has been dismissed, Binance has faced other significant legal challenges. In November 2023, the company settled a separate case with the Department of Justice, agreeing to pay a $4.3 billion fine for violating anti-money laundering and sanctions laws. As part of the settlement, CZ stepped down as CEO and was later sentenced to four months in prison after pleading guilty to anti-money laundering violations.
These developments have prompted Binance to reevaluate its compliance and regulatory strategies, including appointing Richard Teng, a former regulator, as the new CEO to lead the company’s efforts in rebuilding trust and ensuring adherence to legal standards.
Industry Reactions and Implications
The SEC’s decision to drop the lawsuit has been hailed as a victory by the crypto community. Binance referred to the dismissal as a “huge win for crypto,” expressing gratitude to President Trump and SEC Chairman Atkins for their support in moving away from regulation by enforcement.
This move is seen as part of a broader trend under the current administration, which has also included the dismissal of other high-profile crypto cases and the formation of industry roundtables to discuss regulatory frameworks.
However, some experts caution that while the regulatory environment may be becoming more favorable, it is essential to balance innovation with investor protection. The crypto industry continues to face challenges related to security, transparency, and compliance, and ongoing efforts are needed to address these issues effectively.
The SEC’s dismissal of its lawsuit against Binance represents a significant moment in the evolving landscape of cryptocurrency regulation in the United States. It reflects a shift toward a more collaborative and policy-driven approach, aiming to support innovation while establishing clear guidelines for the industry.
As the regulatory framework continues to develop, stakeholders in the crypto space will be closely monitoring these changes and adapting to the new environment. The balance between fostering innovation and ensuring compliance will remain a central theme in the ongoing dialogue between regulators and the cryptocurrency industry.
