SEC Drops Long-Running Case Against Binance
After nearly three years of legal sparring, the US Securities and Exchange Commission (SEC) has unexpectedly withdrawn its high-profile lawsuit against Binance, the world’s largest cryptocurrency exchange.
The decision to end the case—officially filed with a Washington, D.C. federal court on 29 May—raises fresh questions about the direction of crypto regulation in the United States.
The case, originally launched in 2023, had accused Binance and its founder, Changpeng Zhao, of a host of violations ranging from selling unregistered securities to misleading investors and mishandling customer funds.
But now, both sides have agreed to walk away.
With a court filing signed by representatives of the SEC, Binance, and Zhao, the lawsuit is "dismissed with prejudice,” meaning it cannot be reopened.
What triggered the SEC’s legal retreat?
The sudden change comes amid a shift in political and regulatory leadership.
Under the Biden administration and SEC Chair Gary Gensler, the agency took an aggressive stance against the crypto industry between 2021 and 2024.
Binance, along with several other major platforms such as Coinbase, Kraken, and Gemini, found itself facing lawsuits for allegedly offering unregistered securities and failing to follow market rules.
One of the most striking details from the SEC’s original complaint was an internal message cited from December 2018, in which a compliance officer at Binance reportedly told a colleague:
“We are operating as a fking [sic] unlicensed securities exchange in the USA bro.”
Gensler accused Binance of constructing a “web of deceit,” claiming the exchange pretended to enforce compliance controls while actively flouting US laws behind the scenes.
According to the SEC at the time, Binance had allowed American users to continue trading on its main platform, inflated its trading volumes, and diverted customer funds.
But following Donald Trump’s return to office and the appointment of Paul Atkins as the new SEC Chair, the Commission has pivoted.
The Binance case is just one of several crypto-related lawsuits dropped in recent months.
A growing number of voices within the industry now view the regulator’s previous approach as excessive.
Binance Speaks Out After SEC Exit
In response to the dismissal, Binance posted on X to celebrate the outcome, describing it as a “huge win”.
The exchange wrote:
“Huge win for crypto today. The SEC’s case against us is dismissed.
Thank you to Chairman Atkins & the Trump team for pushing back against regulation by enforcement. U.S. innovation is back on track - and it’s just the beginning.”
A spokesperson further praised the regulatory shift, stating,
“We’re deeply grateful to Chairman Paul Atkins and the Trump administration for recognizing that innovation can’t thrive under regulation by enforcement. The U.S. is back—leading from the front in the future of blockchain.”
Binance.US, the exchange’s US affiliate which was also named in the lawsuit, echoed a similar sentiment.
“This outcome confirms what we have always known: that we did not violate U.S. securities laws. [..] With this case behind us, we’re turning our full attention to growth—expanding crypto access, winning back trust, and restoring relationships that were impacted by the SEC.
We’re more optimistic than ever about the future of http://Binance.US and crypto in the U.S.”
Source: X
How Did The Case Begin?
Back in 2023, the SEC accused Binance of illegally listing tokens the agency considered securities, including several popular cryptocurrencies.
It also alleged that Binance used complex arrangements to disguise ownership structures and mislead regulators and investors about its operations.
The complaint highlighted how Binance’s US-facing business had failed to properly prevent American customers from accessing the global platform.
Despite the severity of the charges, Binance never admitted wrongdoing, and the lawsuit did not progress to trial.
It remained locked in procedural motions and negotiations for over two years.
A New Tone in Crypto Oversight
The decision to shut down the Binance case reflects a broader retreat from the aggressive enforcement strategy of the past.
Since Paul Atkins took over the SEC earlier this year, the regulator has moved to clear its backlog of crypto lawsuits.
Alongside Binance, several other exchanges have seen their legal troubles with the SEC come to an end, including Kraken, Gemini, and Robinhood.
Atkins, a long-time advocate of market-friendly regulation, has openly stated his desire to make the US a hub for blockchain innovation.
His appointment, backed by President Trump, has coincided with an easing of hostilities between Washington and the crypto sector.
While the SEC did not comment extensively on its decision, the Commission said the dismissal was an appropriate use of its discretion.
No financial settlement was disclosed, and Binance continues to operate with its native token BNB trading at around $675.95, down 1.66% over the past 24 hours, according to CoinMarketCap.
For now, one of the most high-profile legal challenges in the crypto industry has come to a quiet end—raising eyebrows across both regulatory and financial communities.
Catherine
