In a major shift for U.S. crypto policy, the Securities and Exchange Commission (SEC) has officially dropped its lawsuit against Binance and its founder Changpeng Zhao (CZ). This marks the end of one of the last remaining enforcement actions from a turbulent period in American crypto regulation.
The dismissal was filed on Thursday, May 23, 2025, in the U.S. District Court for the District of Columbia. Lawyers representing both the SEC and Binance jointly moved to dismiss the case, which was originally launched in June 2023.
The court granted the motion with prejudice, meaning the SEC cannot refile the same claims in the future.
A Two-Year Legal Battle Comes to a Close
The SEC had accused Binance of multiple violations. These included:
- Illegally offering services to U.S. users
- Manipulating trading volumes
- Mixing customer funds with company assets
- Enabling the trade of what the SEC called “unregistered securities”
These allegations mirrored similar lawsuits the SEC filed against other exchanges such as Coinbase and Kraken during the tenure of former SEC Chair Gary Gensler.
At the time, the agency pursued a broad legal strategy against crypto platforms, seeking to apply traditional securities laws to emerging digital assets. But under new leadership, the SEC has taken a much different path.
A New Era of Crypto Policy
With Paul Atkins now serving as SEC Chair and Commissioner Hester Peirce taking a more visible role, the agency has shifted away from strict enforcement. Instead, it has focused on industry engagement and deregulation.
Several key policy changes have already been implemented in 2025:
- In January, the SEC repealed Staff Accounting Bulletin (SAB) 121, a controversial rule that required banks to treat crypto assets as liabilities.
- In February, the agency issued new guidance stating that most meme coins are not considered securities, a move that benefits high-profile political crypto projects.
Commissioner Peirce celebrated these rollbacks openly. When SAB 121 was repealed, she posted on X (formerly Twitter): “Bye, bye SAB 121! It’s not been fun.”
The SEC has also hosted a series of roundtable discussions with industry leaders, signaling a more collaborative approach to crypto oversight.
Binance Moves Forward Amid Political Shifts
Binance, the world’s largest cryptocurrency exchange by trading volume, has also undergone major changes. In late 2024, the company agreed to a $4.3 billion settlement with the U.S. government. As part of the deal:
- Founder Changpeng Zhao pled guilty to violations of U.S. financial laws.
- He stepped down as CEO, avoiding jail time.
- Zhao retained much of his wealth despite the charges.
Since then, Binance has pushed forward with new partnerships, including a significant alliance with World Liberty Financial (WLF) — a project that aims to become a crypto bank.
WLF has deep political connections. It funnels 75% of its profits to entities linked to the Trump family. As part of the partnership, Binance is set to receive a $2 billion investment from MGX, a state-backed fund from the United Arab Emirates. The investment is being made entirely in USD1, a new stablecoin launched by the World Liberty team.
Deepening Global Ties: Binance and Pakistan
Binance is also expanding its footprint in South Asia. In early 2025, World Liberty co-founder Zack Witkoff, son of U.S. Middle East envoy Steve Witkoff, brokered a deal with the government of Pakistan.
Shortly afterward, Changpeng Zhao was appointed to a new position: Adviser to Pakistan’s National Crypto Council. This state-backed group is tasked with shaping the country’s national digital asset policy.
The appointment signals a growing interest among U.S.-aligned governments to embrace crypto development, especially when it aligns with broader geopolitical interests.
The SEC’s withdrawal from the Binance case is part of a larger shift in Washington, where the current administration under President Donald Trump is actively trying to court the crypto industry.
Since taking office in January 2025, Trump has:
- Advocated for reduced crypto regulation
- Appointed pro-crypto figures to key financial positions
- Publicly supported digital asset innovation as part of U.S. economic policy
Trump and his family also have financial stakes in the crypto sector. The $TRUMP token, launched just before the January inauguration, has gained massive attention.
Today, the token has a market capitalization of approximately $2.4 billion, with 80% of the supply reportedly held by the Trump Organization and affiliated entities.
The SEC’s new guidance in February, stating that most meme coins are not securities, was widely seen as a win for Trump-backed crypto ventures.
What This Means for Crypto in the U.S.
With the SEC stepping back, the Justice Department disbanding its crypto enforcement team, and the CFTC poised to be led by a venture capitalist with crypto ties, the regulatory landscape has fundamentally changed.
The U.S. is no longer trying to restrict crypto. Instead, it appears to be positioning itself as a global hub for blockchain innovation.
This policy reversal has boosted investor confidence. Markets responded positively to the SEC’s dismissal of the Binance case, with many viewing it as the final chapter of the “crypto crackdown era.”
For Binance, the end of the lawsuit removes a major cloud of uncertainty. The company is now free to expand its global partnerships, innovate new products, and deepen its connections in both the private and public sectors.
Conclusion
The SEC’s decision to drop its lawsuit against Binance and Changpeng Zhao is more than just a legal development. It signals the start of a new era for crypto in the United States, one driven by political support, regulatory clarity, and market optimism.
While challenges remain, the tone has shifted dramatically. For the first time in years, the U.S. crypto industry sees not just hope, but opportunity.
