The US Securities and Exchange Commission (SEC) has made a significant move in its legal battle with Binance and its founder, Changpeng ‘CZ’ Zhao. On May 29, the SEC asked a federal judge to dismiss its civil complaint against the cryptocurrency exchange and Zhao. This development comes after a 60-day pause that was initiated in February to allow the SEC’s crypto task force, led by Commissioner Hester Peirce, to review whether existing securities rules applied to digital-asset platforms like Binance.
During this review period, Binance continued to cooperate with an earlier consent order that required the exchange to provide greater transparency into its custodial controls and ensure the segregation of US customer assets. In a statement, Binance referred to the SEC’s decision to dismiss the case as a “huge win for crypto,” thanking Chairman Atkins and the Trump team for pushing back against regulation by enforcement and stating that US innovation is back on track.
The SEC’s filing to dismiss the case does not mention any monetary settlement, and it is unclear whether the dismissal is with or without prejudice. Since the defendants did not file counterclaims, the SEC may unilaterally drop the suit under Federal Rule 41(a)(1)(A)(i). Once the dismissal notice is processed by the court clerk, Judge Amy Berman Jackson is expected to formally terminate the matter.
While the SEC has closed this particular case, Binance.US remains under the terms of the consent decree, which includes quarterly compliance reports and third-party audits of custodial wallets. Any future enforcement actions would require the SEC to file a new complaint.
The original SEC action against Binance was filed in June 2023, alleging that the exchange operated as an unregistered securities exchange, broker-dealer, and clearing agency. The complaint accused Binance of inflating trading volumes, diverting customer assets, and misleading investors about surveillance systems. Binance denied these allegations, arguing that its digital asset listings did not qualify as securities and that its global operations were beyond the SEC’s jurisdiction.
In a parallel criminal investigation, the US Department of Justice concluded in November 2024 with Binance pleading guilty to Bank Secrecy Act violations and agreeing to a $4.3 billion settlement. Changpeng Zhao was sentenced to four months in prison, which he completed in September 2024.
Overall, the dismissal of the SEC’s case marks the end of a two-year-long legal battle between the SEC and Binance Holdings Ltd., BAM Trading Services Inc., and Changpeng Zhao. The court is expected to close the docket upon receiving the dismissal notice, officially concluding this chapter in the ongoing regulatory scrutiny of the cryptocurrency industry.