The SEC dropped its lawsuit against Binance and founder Changpeng Zhao.
Regulatory tone shifted under Trump with fewer aggressive crypto actions.
Dismissal may boost clarity and participation in U.S. crypto markets.
The SEC has officially announced it is dropping its lawsuit against Changpeng Zhao (CZ), founder of Binance and the company. The court’s judgment brings an end to a battle that began earlier in 2023 after claims the platform sold unlisted securities and broke U.S. law. The move highlights the departures from tough regulations in the Trump administration, now less aggressive toward the cryptocurrency industry.
Background of the Lawsuit
The SEC's 2023 lawsuit accused Binance’s CZ, and Binance.US of offering unregistered securities. The complaint also claimed that Binance failed to block U.S. users from accessing the main exchange platform. Regulators argued that the exchange commingled customer funds through a deceptive setup described as a "web of deceit." Gary Gensler, then SEC Chair, stated that Binance announced compliance controls publicly but ignored them internally to maintain large American user access.
In one notable element, the lawsuit quoted a December 2018 internal communication where Binance's Chief Compliance Officer reportedly admitted to operating as an unlicensed securities exchange in the U.S. This was part of the regulator’s case that Binance willfully evaded securities laws. Since the lawsuit's filing, the regulatory space has transformed. The SEC, under Chair Gary Gensler, pursued numerous crypto-related actions targeting key exchanges like Kraken and Coinbase.
However, the return of the Trump administration modified the SEC’s stance toward cryptocurrency guidelines. President Trump’s administration has favored a softer stance on crypto, resulting in the dismissal of multiple high-profile cases and investigations. The SEC’s new crypto task force, led by Hester Peirce, advocates for less confrontational regulatory methods. This change has impacted ongoing litigation, including the case against Binance.
Official Statements and Impact
Binance.US issued a statement confirming the SEC’s dismissal of charges. The company noted that the decision clears any doubts about violations of U.S. securities laws. The settlement allows Binance.US to concentrate on its business operations and restoring relationships affected by the lawsuit.
An official representative at Binance has called the resolution an important achievement. The document credited Chairman Atkins and the Trump team for helping innovation by lowering the level of regulation. Dropping the lawsuit on Binance shows that the SEC is paying closer attention to crypto regulation in the U.S. It shows that the industry will move towards teamwork with regulators instead of only strict actions. This could inspire other businesses in the industry to set up their practices according to clearer rules.
Between 2021 and 2024, the SEC had a tough stance against crypto, but the latest change may clear up some of the legal issues that have worried the public. Lifters’ decision to withdraw from this lawsuit may lead to more involvement by U.S. citizens on cryptocurrency platforms. The move is a sign of the political climate in Washington, where digital assets are a main area of focus for policymakers. By dropping this case, the SEC is showing that its priorities are moving with the change in administration.
