The U.S. Securities and Exchange Commission (SEC) has officially dismissed its lawsuit against Binance, the world’s largest cryptocurrency exchange, and its founder, Changpeng Zhao. This decision concludes a nearly two-year legal confrontation that began in June 2023, when the SEC accused Binance of operating unregistered securities exchanges and misrepresenting trading practices.

The dismissal was filed with prejudice, meaning the SEC cannot refile the case in the future. This move aligns with the SEC’s evolving approach to cryptocurrency regulation under President Donald Trump’s administration, which contrasts with the stricter stance taken under former President Joe Biden.

Background of the Lawsuit

The SEC’s lawsuit against Binance and Zhao alleged that the company engaged in unregistered offers and sales of crypto asset securities and made false statements to investors. The regulator also claimed that Binance allowed U.S. customers to trade on its platform despite restrictions and that it commingled customer funds with company assets.

In a separate case, Binance and Zhao settled with the Department of Justice in November 2023, agreeing to pay a $4.3 billion fine. Zhao stepped down as CEO and was later sentenced to four months in prison in April 2024 for violating anti-money laundering laws.

Shift in Regulatory Approach

The SEC’s decision to drop the lawsuit reflects a broader shift in the agency’s approach to cryptocurrency regulation under the Trump administration. Since taking office, President Trump has appointed Paul Atkins, a former crypto lobbyist, as SEC Chair. Atkins has expressed intentions to create a clear regulatory framework for digital assets, moving away from the previous administration’s enforcement-heavy approach.

The SEC has also established a Crypto Task Force aimed at developing supportive regulatory policies for the industry. This task force is expected to play a significant role in shaping the future of cryptocurrency regulation in the United States.

Industry Reactions

Binance welcomed the SEC’s decision, describing it as a “huge win for crypto.” The company expressed gratitude towards President Trump and SEC Chair Paul Atkins for their roles in shifting the regulatory landscape.

The dismissal of the lawsuit has been met with optimism within the cryptocurrency industry, with many viewing it as a sign of a more favorable regulatory environment. Bitcoin prices have surged over 50% since President Trump’s election win, reflecting increased investor confidence.

Final Takeaway

The SEC’s decision to drop its lawsuit against Binance marks a significant turning point in the U.S. government’s approach to cryptocurrency regulation. Under the Trump administration, there is a clear shift towards creating a more supportive environment for digital assets, focusing on establishing clear guidelines rather than pursuing aggressive enforcement actions. This development is likely to encourage further growth and innovation within the cryptocurrency industry.

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