SEC Dropped the Lawsuit Against Binance After 2 Years

The US Securities and Exchange Commission (SEC) voluntarily dismissed its lawsuit against Binance yesterday (Thursday) with prejudice, meaning the agency cannot pursue the case again.

The regulator had sued Binance and Changpeng Zhao, its founder and former CEO, in June 2023, accusing them of artificially inflating the exchange's trading volumes. Other charges included the diversion of customer funds and misleading investors about the exchange’s surveillance controls.

The exchange was also accused of facilitating the trading of cryptocurrencies that could be classified as unregistered securities.

“A Landmark Moment”

The dismissal came months after the regulatory agency paused the case to assess the impact of the crypto task force. The official dismissal has now been finalised as a joint stipulation of dismissal—signed by the lawyers representing the SEC, Binance, and Zhao—and was filed in the Washington D.C. federal court.

🚨NEW: The @SECGov and @binance have filed a joint stipulation seeking a dismissal in the agency’s ongoing litigation against the exchange. pic.twitter.com/CiNNbi6WeX

According to the SEC, dropping the enforcement case was appropriate “in the exercise of its discretion and as a policy matter.” However, the agency clarified that the move does not indicate a change in its position on other cryptocurrency-related litigation.

A Binance spokesperson called the dismissal “a landmark moment,” adding: “We’re deeply grateful to [SEC] Chairman Paul Atkins and the Trump administration for recognising that innovation can’t thrive under regulation by enforcement.”

Penalties and Prison

Binance and its founder previously also faced criminal charges for lapses in anti-money laundering compliance and sanctions violations. The exchange paid over $4.3 billion to settle charges brought by the US Department of Justice, and a further $2.85 billion to settle with the Commodity Futures Trading Commission (CFTC).

Zhao pleaded guilty to one of the money laundering charges and served four months in prison. He also stepped down as Binance CEO but remains the exchange’s majority shareholder.

Despite these settlements, the SEC had continued to pursue its case against the exchange—until now.

The agency’s decision to dismiss the lawsuit was not unexpected, as it is increasingly positioning itself as crypto-friendly under the Trump administration. The SEC has also dropped several other high-profile crypto lawsuits, including those against Ripple and Coinbase, along with some ongoing investigations.