US drops lawsuit against Binance
The Securities and Exchange Commission (SEC) of the United States voluntarily ended its civil case against Binance, the largest cryptocurrency exchange globally, on Thursday, signaling a potential change in the regulatory approach under President Donald Trump’s renewed administration.
A formal dismissal agreement, endorsed by the legal representatives of the SEC, Binance, and its founder Changpeng Zhao, was submitted to a federal court in Washington. The case was dismissed with prejudice, which prohibits it from being brought forth again.
The SEC clarified that the decision to dismiss was made “in the exercise of its discretion and as a policy matter,” stressing that it doesn’t imply a change in the agency’s position regarding other ongoing cases related to cryptocurrency.
A representative from Binance celebrated the ruling as a “landmark moment,” thanking SEC Chairman Paul Atkins and the Trump administration for “acknowledging that innovation cannot flourish under regulation via enforcement.”
The lawsuit, initially filed in June 2023, accused Binance and Zhao of exaggerating trading volumes, misusing customer assets, and misleading investors about their internal compliance and monitoring systems. It also claimed that Binance enabled the trading of tokens that, under the previous administration's guidelines, were deemed unregistered securities.
The civil case was distinct from Binance’s well-known guilty plea in November 2023, which led to a criminal fine of \$4.32 billion for breaching anti-money laundering and sanctions regulations. Zhao, who admitted to related charges, completed a four-month prison sentence and was released in September.
The dismissal of the Binance case follows a similar action in February when the SEC withdrew an enforcement action against Coinbase, the largest cryptocurrency exchange in the U.S., which had been accused of illegally trading unregistered securities.
These occurrences highlight a notable change in the SEC’s stance on cryptocurrency oversight. Under former SEC Chairman Gary Gensler during the Biden administration, the agency aggressively targeted crypto companies through enforcement actions. Chairman Atkins, appointed by Trump, has alternatively pushed for clearer regulatory guidelines and has reduced the frequency of these actions.
“The objective is to establish a regulatory framework that fosters innovation while addressing malicious actors,” Atkins stated earlier this month.
Even with this shift, enforcement actions are not entirely discontinued. On May 20, the SEC launched a lawsuit against Unicoin, alleging that the company and its leaders fraudulently secured over $100 million by making false claims about the security and backing of their tokens.
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