US Regulator Dismisses Suit Against Binance in a Shift Towards Crypto-Friendliness Under Trump Administration
May 30, 2025
In a significant development for the cryptocurrency industry, the U.S. Securities and Exchange Commission (SEC) announced on Thursday that it has voluntarily dismissed its civil lawsuit against Binance, the world’s largest cryptocurrency exchange. This decision marks a notable change in regulatory sentiment toward cryptocurrencies since Donald Trump’s return to the White House in 2025. ### Background of the Case
The SEC first filed its lawsuit against Binance and its founder, Changpeng Zhao, in June 2023. The allegations centered around purported trading irregularities, including accusations that Binance artificially inflated trading volumes, diverted customer funds, and misled investors regarding its surveillance controls. Additionally, the SEC claimed that Binance unlawfully facilitated the trading of certain cryptocurrencies that it classified as unregistered securities.
This lawsuit was distinct from a previous legal issue where Binance faced a $4.32 billion criminal penalty following a guilty plea over violations of federal anti-money laundering and sanctions laws in November 2023. Zhao, who stepped down as CEO amid these legal troubles, served a four-month prison sentence before his release in September 2024. ### Dismissal of the Case
The stipulation of dismissal was formalized in the Washington, D.C. federal court, and notably, the dismissal is with prejudice. This means the SEC is barred from reinitiating the lawsuit in the future. In a statement, the SEC indicated that the withdrawal of the enforcement case was made in the spirit of regulatory discretion and policy.
A spokesperson for Binance expressed satisfaction with the outcome, framing it as a "landmark moment." The representative expressed gratitude toward SEC Chairman Paul Atkins and the Trump administration for acknowledging that innovation in the cryptocurrency sector should not be stifled by enforcement-heavy regulations.
A New Era of Cryptocurrency Regulation
Since taking office, Trump has pledged support for the cryptocurrency industry, projecting himself as a "crypto president." This initiative includes becoming the first major presidential candidate to accept cryptocurrency donations. Under his administration, there has been a notable withdrawal or postponement of several cryptocurrency enforcement cases spearheaded by former SEC chairman Gary Gensler.
Atkins has emphasized the need for a coherent regulatory framework that establishes “clear rules of the road” for the cryptocurrency market, balancing adequate oversight while encouraging lawful innovation. In February 2025, the SEC similarly dismissed a separate enforcement case against Coinbase, the largest cryptocurrency exchange in the U.S., which was accused of facilitating trading in multiple unregistered tokens.
The Broader Implications
The reversal of enforcement actions under the Trump administration signals a potential shift in how federal regulators view and interact with the cryptocurrency sector. Many in the crypto community have long argued against regulatory applications that classify digital tokens as securities, fearing it could impose burdensome requirements on cryptocurrency businesses.
The Binance case and subsequent dismissal might be seen as a hopeful sign for crypto advocates seeking a more balanced regulatory approach that fosters growth and innovation.
As the landscape of cryptocurrency regulation continues to evolve, stakeholders in the industry will be closely watching the implications of this legal dismissal and any future regulatory actions that might arise under the current administration.
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