SEC Moves to End Binance Lawsuit as Crypto Enforcement Eases

The U.S. Securities and Exchange Commission (SEC) is officially backing away from its legal battle with Binance, marking another step in the agency’s broader retreat from crypto enforcement under the current administration. A joint court filing on May 29 by the SEC, Binance, and company co-founder Changpeng Zhao asked for the case to be dismissed permanently.

Good to know

• The SEC seeks to drop the Binance lawsuit with prejudice, meaning it cannot refile.
• The agency cited policy discretion and internal reviews as factors in the decision.
• Binance had already settled separate charges with the Department of Justice.

The joint motion submitted to a federal court in Washington, D.C. calls for the dismissal of the SEC’s lawsuit filed in June 2023. That complaint accused Binance, its U.S. entity BAM Trading, and Zhao of violating securities laws, misusing customer funds, and misleading investors. Now, the SEC is asking to end the case with prejudice, effectively closing the door on any future attempts to relitigate.

The motion pointed to the SEC’s Crypto Task Force as a factor in reevaluating the case, suggesting that internal reviews could help lead to broader resolutions. The regulator stated that the dismissal is appropriate “in the exercise of its discretion and as a policy matter.”

Background on the Lawsuit

The case against Binance had already been stalled earlier this year. In both February and April, the SEC agreed to pauses in proceedings, citing developments within its crypto division. These pauses hinted that a full dismissal could be on the horizon.

Meanwhile, Binance and Zhao reached a separate resolution with the Department of Justice in November 2023. That agreement included a $4.3 billion penalty and admissions that the company violated financial sanctions, operated without license, and lacked proper Anti-Money Laundering protocols. Zhao stepped down as CEO and later received a four-month prison sentence in April 2024 after pleading guilty to money laundering violations.

Binance Celebrates, SEC Shifts Direction

Binance posted on X, calling the dismissal a “huge win for crypto.” The company also thanked former President Donald Trump and newly appointed SEC Chair Paul Atkins for “pushing back against regulation by enforcement.”

The withdrawal marks another rollback in the SEC’s approach to crypto under the Trump administration. With Atkins now leading the agency, the SEC has dropped or settled several other crypto-related cases previously filed under the Biden administration. Recent examples include closures of actions involving Coinbase, Kraken, and ConsenSys, along with investigations into Circle, Immutable, and OpenSea. The agency is now working on unified framework for crypto and securities.