The U.S. Securities and Exchange Commission on Thursday voluntarily dismissed its civil lawsuit against Binance, the world’s largest cryptocurrency exchange, extending the regulator’s new approach to cryptocurrencies since President Donald Trump reentered the White House.
A joint stipulation of dismissal signed by lawyers for the SEC, Binance and Binance founder Changpeng Zhao was filed in the Washington, D.C., federal court.
The SEC said dismissing the enforcement case was appropriate “in the exercise of its discretion and as a policy matter,” and did not reflect its view on other cryptocurrency litigation.
Its dismissal is with prejudice, meaning the SEC cannot pursue the case again.
In a statement, a Binance spokesperson called the dismissal “a landmark moment. We’re deeply grateful to (SEC) Chairman Paul Atkins and the Trump administration for recognizing that innovation can’t thrive under regulation by enforcement.”
An SEC spokesperson declined additional comment.
The SEC sued Binance and Zhao in June 2023, accusing the exchange of artificially inflating trading volumes, diverting customer funds and misleading investors about its surveillance controls.
Binance was also accused of unlawfully facilitating trading of several cryptocurrency tokens that SEC leadership during President Joe Biden’s administration believed should have been registered as securities.
The case was separate from Binance’s November 2023 guilty plea and $4.32 billion criminal penalty for violating federal anti-money laundering and sanctions laws through lapses in internal controls.
Zhao pleaded guilty to anti-money laundering violations, and was released from prison last September after serving a four-month sentence.
In February, the SEC dismissed a separate enforcement case accusing Coinbase, the largest U.S. cryptocurrency exchange, of arranging trading in at least 13 unregistered tokens.
The crypto industry has long chafed over regulatory efforts to apply federal securities laws to digital assets, with many companies likening tokens to commodities.
Classifying tokens as securities would require cryptocurrency companies to register with the SEC and disclose more to investors.
Atkins said on May 12 that developing a regulatory framework that establishes “clear rules of the road” for issuing, trading and safekeeping crypto assets, while discouraging lawbreakers, would be a key priority.
On May 20, the SEC sued Unicoin, accusing the startup and executives of fraudulently raising more than $100 million to launch tokens they claimed were safe and backed by real estate and equity in companies that had yet to go public.
Trump promised during his 2024 White House run to be a “crypto president,” and pledged to reverse an industry crackdown overseen by Atkins’ predecessor Gary Gensler. The SEC has since withdrawn or put on hold many cryptocurrency enforcement cases.
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