SEC withdraws lawsuit against Binance: A big victory for crypto!

SEC withdraws lawsuit against Binance: A big victory for crypto!

The US Securities and Exchange Commission (SEC) will drop its lawsuit against crypto exchange Binance, a withdrawal being hailed as a major victory for the entire crypto industry. This decision ends a legal battle that has lasted over two years and has been stressful for many in the industry. Both the SEC and Binance and co-founder Changpeng Zhao filed a joint motion to dismiss the case in a federal court in Washington, DC on May 29, 2025.

The lawsuit, filed in June 2023, accused Binance of violating securities laws, commingling customer funds, and artificially inflating trading volumes. Binance CEO Changpeng Zhao resigned in 2023 over his involvement in the proceedings and was sentenced to four months in prison in a separate money laundering trial after the company accepted a $4.3 billion fine in November 2023.

The withdrawal of the lawsuit

The decision to drop the lawsuit is described by the SEC as “discretionary and a policy action.” This action is not only a sign of possible regulatory relaxation, but is also seen as a step by the SEC to change its stance under the Biden administration. It is suggested that the SEC's crypto task force could influence the resolution of the litigation, suggesting that a rethink in regulatory strategy is taking place.

Binance itself described the application as a “huge victory for crypto”. The withdrawal of the lawsuit is seen as a symbolic end to the Biden administration's crackdown on cryptocurrencies, which has been marked by a large number of lawsuits against crypto firms in recent years. The settlement of the dispute suggests that the SEC may be taking a less confrontational approach, especially since Paul Atkins, who was appointed head of the SEC under the Trump administration, has been seeking a clearer framework for digital assets.

Impact on the crypto industry

Despite the conclusion of the legal dispute, the crypto industry remains characterized by uncertainty. Regulators worldwide are working on new regulations, and Binance will have to adapt to growing requirements. Nevertheless, the company sees itself in a strong position to benefit from a possible optimism after the end of the SEC proceedings.

In recent months, Binance had taken several steps to improve its compliance with regulatory requirements. The successful resolution of the legal dispute gives the company the opportunity to emerge stronger from the past and focus on the future.

The SEC had previously dropped or settled several lawsuits against crypto firms under the Biden administration, and the current withdrawal of the lawsuit against Binance could be seen as part of a broader shift in how the industry is regulated. Binance, the largest crypto exchange in the world, has established itself as a leader in the industry and will certainly be following developments closely.