The U.S. Securities and Exchange Commission on Thursday formally dropped its civil lawsuit against Binance, the world's largest cryptocurrency exchange, marking a major reversal in the agency's approach to crypto regulation under President Donald Trump. The SEC's move to dismiss the case with prejudice prevents it from bringing the same charges again, signaling a broader policy shift in Washington's treatment of the digital asset industry.
The joint stipulation, filed in federal court in Washington, D.C., was signed by attorneys for the SEC, Binance, and Binance founder Changpeng Zhao. "We're deeply grateful to [SEC] Chairman Paul Atkins and the Trump administration for recognizing that innovation can't thrive under regulation by enforcement," a Binance spokesperson told Reuters, calling the development "a landmark moment."
The SEC sued Binance and Zhao in June 2023, alleging the company operated an unregistered exchange, misled investors, artificially inflated trading volumes, and improperly diverted customer funds. The regulator also claimed Binance allowed illegal trading of tokens it viewed as unregistered securities. These allegations stemmed from enforcement priorities during President Joe Biden's administration, led by former SEC Chair Gary Gensler.
The case was distinct from a separate criminal investigation brought by the Department of Justice, which resulted in Binance pleading guilty in November 2023 to violating anti-money laundering and sanctions laws. Binance agreed to pay $4.32 billion in penalties. Zhao paid $50 million in fines and served a four-month prison sentence before being released last September.
An SEC spokesperson declined further comment Thursday, but said in the filing the dismissal was made "in the exercise of its discretion and as a policy matter," not as a statement on the underlying merits of the case or other crypto-related litigation.
The Binance case is the latest to be closed under the Trump administration's evolving stance toward cryptocurrency. In February, the SEC also dismissed a high-profile enforcement action against Coinbase, the largest crypto exchange in the U.S. That followed the disbanding of a Department of Justice unit focused on crypto-related fraud in April.
Trump has positioned himself as an ally of the industry. He has launched a Crypto Strategic Reserve, dined privately with crypto investors, and actively promoted his own $TRUMP meme coin. He has also pledged to be a "crypto president" and promised to reverse regulatory pressure imposed by the previous administration.
SEC Chairman Paul Atkins said in a May 12 speech that the agency's focus would shift toward "clear rules of the road" for crypto rather than enforcement.
Still, the SEC continues to pursue some crypto-related cases. On May 20, it filed suit against Unicoin, accusing the startup of fraudulently raising over $100 million through token sales allegedly backed by unlisted companies and real estate. But the agency has withdrawn or paused many of its high-profile actions, reflecting a broader retreat from the aggressive posture of the past two years.
