The U.S. Securities and Exchange Commission (SEC) has formally ended its nearly two-year legal battle with crypto exchange Binance and its co-founder Changpeng Zhao (CZ). In a joint motion filed on May 29, the SEC, Binance, and CZ requested the case be dismissed with prejudice—meaning it cannot be refiled in the future.
Initially filed in June 2023, the lawsuit accused Binance and its U.S. affiliate BAM Trading of multiple securities violations, including mishandling user funds and misleading investors. However, with the SEC’s newly established Crypto Task Force reshaping its enforcement agenda, the agency now says dismissing the case is “appropriate in the exercise of its discretion and as a policy matter.”
This marks one of the most significant reversals in the SEC’s recent enforcement campaign, as pressure grows from crypto firms and lawmakers for clearer regulatory guidelines over punitive litigation.
Legal Delays and a Strategic Pivot
The case against Binance had already been paused twice in 2025—first in February, then again in April—amid internal SEC debates over crypto policy in the wake of Trump’s re-election. The formation of the Crypto Task Force was widely seen as a sign the agency was reassessing its approach under new political leadership.
In the motion to dismiss, the SEC referenced the task force directly, stating it could “impact and facilitate the potential resolution of this litigation.”
By choosing to drop the case with prejudice, the SEC has not only ended the proceedings but also signaled a permanent closure—marking a stark contrast to its previous aggressive posture.
Binance Responds as Legal Clouds Begin to Lift
While the SEC’s dismissal is a major win for Binance, the company is still recovering from reputational damage tied to its separate settlement with the U.S. Department of Justice. In November 2023, Binance and CZ agreed to pay $4.3 billion to resolve allegations of sanctions violations, unregistered money transmission, and anti-money laundering (AML) failures.
The agreement remains one of the largest penalties in crypto history. As part of the settlement, Zhao resigned as CEO and later pleaded guilty to an AML-related charge. In April 2024, he was sentenced to four months in federal prison, making him one of the few prominent figures in the industry to serve time.
Despite this, Binance welcomed the SEC’s dismissal as a validation of its stance. In a post on X (formerly Twitter), the company called the move a “huge win for crypto” and credited the Trump administration for fostering a more innovation-friendly regulatory environment.
The statement also praised President Trump and new SEC Chair Paul Atkins for “pushing back against regulation by enforcement,” echoing a sentiment shared widely across the crypto community.
A Broader Shift in U.S. Crypto Policy
The SEC’s withdrawal from the Binance case is part of a broader pattern. Earlier this year, the agency also dropped lawsuits against Coinbase and Kraken, suggesting a deep recalibration of its crypto enforcement strategy.
The shift reflects the Trump administration’s renewed focus on pro-growth digital asset policies. Officials have emphasized a preference for regulatory frameworks developed in collaboration with the industry, rather than relying on litigation as a tool of compliance.
This regulatory softening comes amid a surge in crypto market optimism. Bitcoin has hit multiple new all-time highs since Trump’s return to office, and institutional interest continues to grow—fueled by increasing ETF activity and the rise of Bitcoin as a treasury reserve asset.
Quick Facts
- The SEC has dismissed its lawsuit against Binance and CZ with prejudice, closing the case permanently.
- The move follows the creation of the SEC’s new Crypto Task Force.
- Binance previously settled separate DOJ charges, paying $4.3 billion, and CZ served a four-month sentence.
- The SEC’s shift aligns with the Trump administration’s pro-innovation crypto stance.
