The US Securities and Exchange Commission (SEC) on Thursday (May 29) voluntarily dismissed its civil lawsuit against Binance, the world’s largest cryptocurrency exchange, marking another indication of the regulator’s changing stance on digital assets since President Donald Trump returned to the White House.
According to Reuters, a joint stipulation of dismissal was filed in a Washington, D.C. federal court and signed by legal representatives for the SEC, Binance, and Binance founder Changpeng Zhao.
The SEC stated that dismissing the enforcement action was appropriate “in the exercise of its discretion and as a policy matter,” adding that the move did not signal any broader change in its views on other ongoing cryptocurrency litigation.
The dismissal was made with prejudice, meaning the SEC cannot reopen the case.
A Binance spokesperson described the development as “a landmark moment,” adding:
“We’re deeply grateful to (SEC) Chairman Paul Atkins and the Trump administration for recognising that innovation can’t thrive under regulation by enforcement.”
An SEC spokesperson declined to provide further comment.
The SEC initially sued Binance and Zhao in June 2023, alleging that the exchange had inflated trading volumes, diverted customer funds, and misled investors regarding its surveillance practices.
It also accused Binance of facilitating the unregistered trading of several cryptocurrency tokens, which SEC leadership during President Joe Biden’s tenure had classified as securities.
This civil case was separate from Binance’s November 2023 guilty plea and US$4.32 billion criminal penalty for violating federal anti-money laundering and sanctions laws.
Zhao also pleaded guilty to anti-money laundering violations and served a four-month prison sentence before being released in September.
In February, the SEC dropped another enforcement case, this time against Coinbase, the largest US-based cryptocurrency exchange, which had been accused of enabling the trading of at least 13 unregistered tokens.
The crypto industry has long pushed back against the SEC’s efforts to treat digital tokens as securities, a classification that would subject companies to stricter oversight and registration requirements.
Many in the industry argue that digital assets are more akin to commodities.
SEC Chairman Paul Atkins said on 12 May that establishing “clear rules of the road” for issuing, trading, and safeguarding crypto assets, while cracking down on bad actors, would be a top priority.
Despite the policy shift, the SEC has not fully stepped away from enforcement actions.
On May 20, it sued Unicoin, alleging the startup and its executives had fraudulently raised over US$100 million to launch tokens purportedly backed by real estate and shares in pre-IPO companies.
During his 2024 campaign, Trump pledged to become a “crypto president” and vowed to reverse the regulatory clampdown championed by former SEC Chairman Gary Gensler.
Since Trump’s return, the agency has withdrawn or paused several high-profile cryptocurrency enforcement cases.
Featured image credit: Edited by Fintech News America, based on image by EyeEm via Freepik
