SEC Drops Binance Lawsuit in Major Crypto Policy Shift

Washington, D.C., May 30, 2025 - The U.S. Securities and Exchange Commission (SEC) has moved to dismiss its high-profile lawsuit against Binance, the world’s largest cryptocurrency exchange, marking a significant retreat from its aggressive enforcement stance on the crypto industry. The joint motion, filed on May 29, 2025, in a Washington, D.C. federal court by the SEC, Binance, and its co-founder Changpeng Zhao, seeks to end a nearly two-year legal battle that began in June 2023.

This development aligns with a broader shift in U.S. crypto policy under the Trump administration, as the SEC scales back enforcement actions initiated during the Biden era.

A Shift in Regulatory Approach

The SEC’s decision to drop the lawsuit follows a series of pauses in the case, with temporary halts in February and April 2025, as the agency’s Crypto Task Force evaluated its approach. The joint motion cites the task force’s influence, noting that its work could facilitate resolution and that dismissing the case aligns with the SEC’s discretionary and policy priorities. The motion requests dismissal with prejudice, preventing the SEC from refiling the same claims.

The original lawsuit accused Binance, Zhao, and its U.S. arm, BAM Trading, of violating securities laws, mishandling customer funds, and misleading investors. Recent web updates indicate the SEC’s new leadership, under Chair Paul Atkins, is prioritizing dialogue with the crypto industry over litigation, reflecting a softer regulatory stance.

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Binance’s Legal History and Industry Impact

Binance’s legal challenges extend beyond the SEC case. In November 2023, the exchange settled a separate case with the U.S. Department of Justice, paying a $4.3 billion fine for violations including operating as an unlicensed money transmitter, breaching sanctions, and inadequate anti-money laundering measures. As part of that settlement, Zhao resigned as CEO and pleaded guilty to a money laundering charge, resulting in a four-month prison sentence in April 2024.

Binance has hailed the SEC’s dismissal as a major victory for the crypto sector, crediting President Donald Trump and SEC Chair Paul Atkins for moving away from “regulation by enforcement.” Real-time data from web sources shows Binance’s trading volume remains robust, with over $20 billion in daily transactions as of May 2025, underscoring its dominance despite legal hurdles.

Did You Know?
Binance, founded in 2017, processes over 1.4 million transactions per second, making it the largest crypto exchange by trading volume globally.

Broader SEC Retreat from Crypto Enforcement

The dismissal is part of a broader SEC pullback from crypto enforcement under the Trump administration. Since early 2025, the agency has dropped or settled cases against major players like Coinbase, Kraken, and Consensus and closed investigations into Circle, Immutable, and OpenSea. Paul Atkins, a former crypto lobbyist appointed SEC chair, has promised a clearer regulatory framework for digital assets.

The agency has initiated roundtables with industry leaders to shape future policies, signaling a shift toward collaboration. This contrasts sharply with the SEC’s aggressive approach under prior leadership, which saw over 100 crypto-related enforcement actions since 2020, according to recent industry reports.