SEC vs Binance Ends—5 Takeaways from Lawsuit Dismissal

The US Securities and Exchange Commission (SEC) has officially dropped its high-profile lawsuit against Binance and co-founder Changpeng Zhao. The lawsuit, filed in June 2023, alleged Binance was misbehaving by diverting customer funds, inflating trading volumes and offering unregistered securities to US investors through its international platform.

The SEC also accused Binance of illegally listing tokens like Solana and Cardano, which the agency deemed to be securities. An amended complaint in October 2024 added more details to these allegations. But the dismissal “with prejudice” means these claims can’t be refiled, so this chapter is closed for Binance.

Important to note, the SEC said this is a discretionary policy decision and does not set a binding precedent for future crypto enforcement actions.

Policy Shift Means Move From Enforcement to Regulation

The lawsuit was paused twice in early 2025—once in February and again in April—after the formation of a new crypto task force led by acting SEC Chairman Mark T. Uyeda. This group was to guide regulatory strategy in the evolving digital asset space.

The SEC dropping the case aligns with a broader shift from aggressive enforcement to clearer crypto regulations. Binance called it a “huge win for crypto” and credited former President Trump and SEC Chair Paul Atkins for steering the agency away from “regulation by enforcement”.

This also matches the SEC halting enforcement against other major crypto players like Coinbase, Consensys and Kraken—indicating a more measured approach under the current administration’s pro-crypto appointees.

Binance’s Legal Troubles and Industry Impact

• November 2023: Binance settled with the US Department of Justice for $4.3 billion for money laundering and sanctions violations.

• Changpeng Zhao: Resigned as CEO and got a 4 month prison sentence for those charges.

• Crypto Market: The lawsuit dismissal and SEC’s softer stance has boosted investor confidence in the space.

• Regulatory Landscape: The crypto industry is now waiting for new policies that will bring clarity and stability.

With enforcement actions easing, Binance and other crypto companies may see a more predictable future—one of collaboration not confrontation with regulators.