The US financial regulator has ended one of its last remaining crypto enforcement actions by the federal agency, now under the control of the Trump administration.
It February it emerged that the US Securities and Exchange Commission (SEC) was seeking to pause its high-profile lawsuit against the cryptocurrency exchange Binance.
But now in a Thursday filing in the US District Court for the District of Columbia, lawyers for the SEC and Binance jointly moved to dismiss the case.
Image credit SEC
Binance lawsuit
Binance is the world’s largest cryptocurrency exchange – a digital marketplace where customers can buy, sell and store different types of crypto. But it had been in trouble with a number of US agencies under the previous Biden administration.
In March 2023 the Commodity Futures Trading Commission had filed a lawsuit against Binance, which alleged the exchange was operating an “illegal” exchange and a “sham” compliance program.
And then in June 2023 the Securities and Exchange Commission took over and filed lawsuits against both Coinbase and Binance, as well as against Binance’s founder and CEO Changpeng Zhao (also known as CZ). It filed 13 charges against Binance, Zhao and the operator of its purportedly independent US Exchange.
The SEC alleged that, while Zhao and Binance publicly claimed that US customers were restricted from transacting on Binance.com, Zhao and Binance in reality subverted their own controls to secretly allow high-value US customers to continue trading on the Binance.com platform.
Further, the SEC alleged that, while Zhao and Binance publicly claimed that Binance.US was created as a separate, independent trading platform for US investors, Zhao and Binance secretly controlled the Binance.US platform’s operations behind the scenes.
And Binance was also in trouble with the US Justice Department (DoJ), and in November 2023 Binance paid $4.3bn in penalties to the DoJ over criminal charges relating to money laundering and violating sanctions.
The DoJ investigation included allegations that Binance had enabled evasion of sanctions against Iran and Russia and finance for Hamas.
Changpeng Zhao
In May 2024 Changpeng Zhao pleaded guilty and was sentenced to four months in prison for looking the other way as criminals used his platform to move money connected to child sex abuse, drug trafficking and terrorism.
Zhao also stepped down from the platform.
In November 2024 Zhao Changpeng said he had no wish to return to the firm even if he were allowed, after serving four months in a US prison from June to September 2024.
Trump administration
The SEC under Trump has undergone a notable attitude change to the crypto industry, after former SEC chairman Gary Geslet had adopted a much more combative approach to the sector, and had warned that the crypto industry was “rife with bad actors”.
Trump had previously promised to fire Gensler, for leading the drive to more closely regulate crypto firms.
But Gensler stepped down on 20 January 2025 – the day Trump was inaugurated.
Trump’s chosen SEC chairman, Paul Atkins, is a noted cryptocurrency advocate and apparently owns up to $6 million in crypto-related investments.
Image credit US Securities and Exchange Commission (SEC).
In March the SEC agreed in principle to dismiss a lawsuit against crypto firm Kraken that had alleged it was acting as an unregistered securities exchange.
A week prior to that the SEC had also dismissed its cases against Coinbase, the largest US crypto exchange, as well as Consensys.