SEC Agrees to Dismiss Lawsuit Against Binance Without Additional Charges

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4 weeks ago

SEC Drops Lawsuit Against Binance and Changpeng Zhao

In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has jointly filed a stipulation with cryptocurrency exchange Binance to dismiss its lawsuit against the company, its former CEO Changpeng Zhao (CZ), and its U.S. affiliate, Binance.US. This marks a significant development in the ongoing regulatory landscape surrounding digital assets.

The End of a Long-Standing Dispute

The SEC’s decision, under its new leadership, signals a potential shift in its approach to regulating the crypto industry. The lawsuit, initiated in 2023, accused Binance of operating as an unregistered exchange, manipulating trading volumes, and misusing customer funds. Now, the SEC has agreed to withdraw its claims against Binance, Binance.US, CZ, and associated entities.

According to the court filing, both the SEC and Binance have stipulated that the litigation be dismissed with prejudice, meaning the case cannot be brought again based on the same allegations. Neither party will be responsible for costs or fees.

This resolution brings an end to a protracted legal battle that began when the SEC alleged that Binance failed to prevent U.S. investors from accessing Binance.com, artificially inflated trading volumes, and diverted customer funds.

Earlier this year, a judge approved a request to pause the case for 60 days following the establishment of the SEC’s Crypto Task Force, led by Commissioner Hester Peirce. The task force aimed to develop clearer regulatory frameworks for digital assets, signaling a move away from the “regulation by enforcement” approach previously adopted.

“This outcome confirms what we have always known: that we did not violate U.S. securities laws,” Binance.US stated in a post on X.

A Trend of Dismissals

The dismissal of the Binance lawsuit aligns with a growing trend of the SEC dropping litigation or investigations against digital asset companies. Since the departure of former Chairman Gary Gensler, several firms, including Coinbase, Ripple, Kraken, and Consensys, have reached resolutions with the agency.

CZ recently served a four-month prison sentence after pleading guilty to violating the Bank Secrecy Act for failing to implement an adequate anti-money laundering program at Binance. He stepped down as CEO, and Binance paid a $4.3 billion fine.

Controversies and Denials

Reports have surfaced alleging that Binance attempted to negotiate with the presidential family as part of a plan to resume Binance.US operations in the country. It was also claimed that CZ sought a pardon from the Trump administration.

CZ has denied these allegations, as well as reports that he facilitated discussions between the Trump family’s World Liberty Financial (WLFI) team and Pakistani government officials.