SEC Dismisses Case Against Binance After Two-Year Legal Battle

The US Securities and Exchange Commission (SEC) has filed a motion to dismiss its civil complaint against Binance and its founder, Changpeng ‘CZ’ Zhao, according to a four-page filing in the District Court docket on May 29. This development comes after a two-year legal battle that has seen significant twists and turns.

Judge Amy Berman Jackson had placed the case on a 60-day pause in February. This decision was made after both sides informed the court that a new SEC crypto task force, led by Commissioner Hester Peirce, might facilitate the resolution of the litigation. The task force was reviewing whether existing securities rules applied to digital-asset venues, a process that unfolded as Binance continued to cooperate with an earlier consent order. This order required greater transparency into custodial controls and US customer asset segregation.

Binance celebrated the dismissal as a “huge win for crypto” in a statement via X, expressing gratitude to Chairman Atkins and the Trump team for pushing back against regulation by enforcement. The statement also highlighted that US innovation is back on track and that this is just the beginning.

The filing states that the Commission “hereby dismisses” all causes of action against each defendant. The notice does not include a monetary settlement, and the document does not specify whether the dismissal is with or without prejudice. Because the defendants have not filed counterclaims, the agency may drop the suit unilaterally under Federal Rule 41(a)(1)(A)(i). Once the clerk processes the notice, Judge Jackson’s signature is expected to terminate the matter.

While the SEC closes this case, Binance.US remains subject to the consent decree, which mandates quarterly compliance reports and third-party audits of custodial wallets. Any future enforcement would require a new complaint to be filed.

The original complaint, filed in June 2023, alleged that Binance and Binance.US functioned as unregistered securities exchanges, broker-dealers, and clearing agencies. The SEC claimed that the platform inflated trading volumes through wash trades, diverted customer assets to market-making firms controlled by Zhao, and misled investors about surveillance systems designed to deter manipulation. The agency sought injunctive relief, disgorgement of profits, and civil penalties.

Binance denied wrongdoing, arguing that its digital asset listings did not constitute securities under the Howey test and that global operations fell outside the SEC’s jurisdiction. Parallel criminal investigations by 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. Furthermore, Zhao was sentenced to four months in prison, which he served and completed in September 2024.