SEC Drops Lawsuit Against Binance in Major Regulatory Shift

In a notable policy shift, the U.S. Securities and Exchange Commission (SEC) has voluntarily dismissed its lawsuit against Binance and its founder, Changpeng Zhao. The joint motion, filed on May 29, 2025, in a Washington, D.C., federal court, requests the dismissal of the 2023 complaint with prejudice, preventing its re-filing. The SEC cited the establishment of its Crypto Task Force and evolving regulatory approaches as factors influencing the decision. 

This development marks a significant departure from the SEC's previous aggressive stance on cryptocurrency regulation. Under the Biden administration, the SEC had initiated several high-profile lawsuits against crypto firms, including Binance, alleging violations of securities laws. However, with the change in administration and the appointment of Paul Atkins, a former crypto lobbyist, as SEC chair, the agency has shifted towards a more industry-friendly approach. 

Binance, which had previously settled a separate case with the Department of Justice in 2023, agreeing to pay a $4.3 billion fine and admitting to violations, welcomed the SEC's decision. The company expressed gratitude towards President Donald Trump and SEC Chair Paul Atkins for their support in moving away from "regulation by enforcement." 

CZ, had previously sought a presidential pardon from Donald Trump following his 2023 conviction for violating the Bank Secrecy Act—a charge that led to a four-month prison sentence and a lifetime ban from managing Binance. Zhao’s legal team had filed the application in hopes of removing legal barriers that were preventing him from returning to a leadership role in the crypto industry. The request arrived amid Binance’s strategic pivot toward friendlier regulatory environments like Dubai and sparked political controversy, with lawmakers raising concerns about Trump’s growing ties to the crypto world and the potential national security implications.

The dismissal of the lawsuit is seen as a significant victory for the cryptocurrency industry, potentially setting a precedent for future regulatory approaches. As the SEC focuses on developing a clearer regulatory framework, the crypto community anticipates more stable and predictable guidelines moving forward.