The US Securities and Exchange Commission (SEC) has officially dropped its civil lawsuit against the world’s largest crypto exchange, Binance, and its founder, Changpeng Zhao.
The lawsuit, filed in June 2023, accused Binance of, among other things, inflating trading volumes, misappropriating customer funds, and offering unregistered securities. The dismissal of the case was made “with prejudice,” meaning the SEC cannot refile the case. This was reported by Bloomberg.
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Political shift under trump
The SEC’s decision comes in the context of a broader pivot in US crypto regulation since President Donald Trump took office. Under the new leadership of SEC Chairman Paul Atkins, the agency is pursuing a more collaborative approach with the crypto industry. The SEC had already dropped similar cases against Coinbase earlier. Atkins emphasized that establishing clear rules for digital assets should take precedence over enforcement-led regulation.
The industry welcomed the move as a milestone. A spokesperson for Binance stated: “We are grateful for the recognition that innovation cannot thrive under regulation by enforcement.” The withdrawal of the lawsuit is seen as a signal that the US under Trump is adopting a more open stance towards digital assets.
Past and outlook
Despite this recent development, Binance’s past remains checkered. In November 2023, the company pled guilty in a separate case to violating US anti-money laundering laws and paid a 4.3 billion USD fine. Zhao stepped down as CEO and served a four-month prison sentence.
However, the SEC’s latest decision could pave the way for a more stable and innovation-friendly regulatory environment for the crypto industry in the US Industry experts see this as an opportunity for companies to operate under clearer rules and regain investor confidence.
Potential impact on the global crypto market
The withdrawal of the case against Binance could also have international ramifications. Many countries model their crypto regulation on US standards. A regulatory shift in Washington could thus lead to greater openness towards crypto service providers worldwide.
At the same time, Binance-despite its past scandals-could regain institutional credibility, especially if it continues to expand its compliance efforts as promised. Industry insiders believe the exchange may once again attract interest from US investors and partner banks.
