SEC Dismisses Lawsuit Against Binance and CZ

The SEC has officially dropped its high-profile lawsuit against Binance and its founder, Changpeng Zhao (CZ). The move, disclosed in court filings dated May 29, 2025, effectively ends nearly two years of legal proceedings between the top U.S. securities regulator and the world's largest crypto exchange.

Filed in the U.S. District Court for the District of Columbia, the SEC’s notice of voluntary dismissal marks a rare retreat in its aggressive regulatory enforcement campaign under previous leadership. The case was dismissed “with prejudice,” meaning it cannot be refiled in the future — a significant legal concession that signals deeper policy changes within the Commission itself.

The lawsuit, originally filed in June 2023, accused Binance and CZ of multiple violations of U.S. securities laws, including operating an unregistered securities exchange, commingling customer funds, and offering crypto asset securities to the public without proper registration. The SEC alleged that Binance’s global operations were unlawfully accessible to U.S. investors and that the company evaded regulatory oversight through opaque structures.

These charges were part of a broader wave of enforcement actions under then-SEC Chair Gary Gensler, who pursued legal cases against major players like Coinbase, Ripple Labs, and Kraken in a bid to classify most cryptocurrencies as securities. Binance had vehemently denied the SEC's allegations, claiming that the agency was overstepping its jurisdiction.

The official filing did not provide a detailed explanation for the dismissal beyond citing prosecutorial discretion. However, legal analysts and policy watchers see it as part of a broader shift under the Trump administration, which has taken a markedly more favorable view of digital asset innovation.

President Donald Trump’s second-term administration has reshaped the SEC’s leadership, appointing Paul Atkins, a known advocate for financial deregulation and crypto-friendly policies, as SEC Chair. In addition, the White House named venture capitalist David Sacks as its crypto czar, signaling a regulatory pivot from enforcement to collaboration.

This dismissal also comes on the heels of the SEC pausing or backing off from other high-profile lawsuits involving Coinbase, Kraken, and other digital asset platforms, further suggesting a new regulatory philosophy favoring market clarity over litigation.

For Binance, the dismissal offers much-needed legal relief after nearly two years of intense scrutiny. Binance's founder, CZ, stepped down as CEO. Following his departure, Binance appointed Richard Teng — a former Singapore regulator and global markets head at the firm — as its new CEO.

Crypto advocates hailed the dismissal as a landmark moment for the U.S. crypto market, potentially opening the door for more institutional participation and a wave of innovation. Industry groups like the Blockchain Association have long criticized the SEC's approach as regulation by enforcement, arguing that it stifled innovation and left market participants in legal uncertainty.

The SEC’s action—or inaction—now puts the onus on Congress to establish a durable legal framework for digital assets. Multiple bipartisan bills are currently under review in the House and Senate, aiming to clarify the classification of cryptocurrencies, establish rules for stablecoins, and define the roles of regulatory agencies like the SEC and CFTC.

The dismissal of the Binance case may increase political momentum to pass these laws, especially as the U.S. seeks to maintain competitiveness in the global fintech and blockchain economy.

The SEC’s voluntary dismissal of its lawsuit against Binance marks a pivotal moment for the digital asset industry in the United States. It signals a more constructive regulatory environment under President Trump, paving the way for innovation, increased market participation, and the development of a clearer, more supportive framework for crypto growth.