SEC Shuts Down Binance Lawsuit “With Prejudice” - Crypto Enforcement Era Ends?
In a defining moment for crypto regulation, the U.S. SEC has permanently dismissed its lawsuit against Binance and founder Changpeng Zhao. The case is over for good and it’s not just about Binance anymore. This is the clearest sign yet that U.S. crypto enforcement is being phased out in favor of structured policy under the Trump administration.
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What Just Happened
- Lawsuit dismissed with prejudice — the SEC cannot refile
- Trump-era shift: SEC pivots from enforcement to “policy discretion”
- Binance calls it a ‘landmark moment’ for innovation in crypto
- Precedent grows: SEC dropped Coinbase case in February
- Industry implications: opens path for clearer, registration-light crypto frameworks
The Case That Was Supposed to Set the Tone—Then Didn’t
In June 2023, the SEC accused Binance of market manipulation, mishandling customer funds, and offering unregistered securities. That case has now been voluntarily dismissed with prejudice - meaning it’s permanently closed.
What changed? The political climate. Paul Atkins, now SEC Chair under Trump, has been pushing for clear rules instead of legal crackdowns. The SEC noted the dismissal was “as a policy matter,” not based on merits. Translation: it’s a strategic retreat.
Binance Didn’t Walk Away Clean - But They Walked
Separate from this civil lawsuit, Binance paid a $4.32 billion criminal penalty in 2023 over anti-money laundering violations. Zhao served a 4-month sentence and was released in late 2024. But this civil SEC case was different - and its closure shows regulators are rethinking crypto oversight altogether.
“Innovation can’t thrive under regulation by enforcement,” Binance said, crediting Atkins and Trump.
Regulators Are Picking Their Battles
- February 2025: The SEC also dropped its lawsuit against Coinbase, echoing the same strategy.
- May 20, 2025: The SEC sued Unicoin over alleged fraud, showing it's still pursuing clear-cut fraud, not policy gray zones.
This dual-track strategy is becoming clear: target scammers, not infrastructure. That’s the pivot. That’s what makes this dismissal more than a one-off.
Founders, It’s Go Time
If you’re operating a centralized exchange, launching a U.S.-based token, or advising crypto clients:
- Registration burdens may ease, especially for token offerings
- A new crypto rulebook is in development, according to Atkins
- Trump’s re-election has reversed the Gensler crackdown
This could spark a wave of new U.S. projects, listings, and high-volume trading strategies - especially for teams using tools like BananaGun to stay ahead of on-chain volume shifts.
FAQ
Q: Is Binance still facing criminal penalties?
No. The criminal case was resolved in 2023 with a $4.32B settlement and jail time for Zhao. This SEC case was civil - and now closed permanently.
Q: Does this mean all SEC crypto cases will be dropped?
Not necessarily. Fraud-based cases like Unicoin’s will still move forward. But registration-related actions appear to be paused or reversed.
This isn’t just a win for Binance. It’s the turning point for U.S. crypto policy. If the SEC continues down this path, founders and funds can finally build without looking over their shoulder. Just don’t confuse this with a free-for-all - fraud still has a target on its back.
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