In a concluding move that appears to mark the end of a significant chapter, the Securities and Exchange Commission (SEC) has dropped its lawsuit against Binance and its founder, Changpeng Zhao. This case was among the final major legal battles following the government’s earlier efforts to regulate the cryptocurrency sector.
How We Got Here
In 2023, the SEC made serious allegations against Binance, accusing the exchange of fraudulent practices including manipulating trading volumes, permitting U.S. users access to services that were not allowed, and offering crypto tokens deemed as unregistered securities. Additionally, they claimed that the company improperly handled customer funds, risking users’ investments.
🚨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
— Eleanor Terrett (@EleanorTerrett) May 29, 2025
In another legal complication, the Department of Justice (DOJ) also pursued the exchange, eventually leading to a $4.3 billion settlement. Following this, Zhao stepped down as CEO, paid a $50 million fine, and agreed to stringent operational conditions, though he retained control over Binance.
Lawsuit? What Lawsuit?
Fast forward to May 29, 2025, the SEC unexpectedly opted to terminate the ongoing lawsuit, filing for dismissal “with prejudice,” which indicates that the case will not be revisited. The notice did not furnish substantial details but noted that this decision followed a comprehensive review process.
This quiet conclusion contrasts starkly with the initial tumult surrounding the case, lacking any dramatic courtroom confrontations.
Why It Matters
The ramifications of this decision extend beyond just Binance, affecting the trajectory of regulatory practice concerning crypto in the U.S. Previously, the SEC had an aggressive strategy targeting major players in the industry to set precedents. However, it appears this approach might be softening.
Recent shifts in the administration, highlighted by changes under President Trump, have led to more constructive engagements with cryptocurrency firms. SEC Chairman Paul Atkins, appointed during Trump’s tenure, has exhibited a willingness to collaborate rather than confront the industry.
The SEC’s dismissal of the Binance lawsuit is the second significant case dropped in 2025, suggesting a potential trend away from stringent enforcement practices in the crypto domain.
So What Now?
For Binance, the end of this legal battle removes a substantial barrier, allowing the company to focus on regaining trust among its users. For the broader cryptocurrency market, this may signify a thaw in regulatory temperatures, providing breathing room for developers, investors, and enthusiasts alike. As the storm appears to have calmed, the industry can now refocus and strategize for the next chapter.
