- The U.S. Securities and Exchange Commission has filed to dismiss its lawsuit against Binance and CEO Changpeng Zhao
- The regulator has cited a settlement in the parallel criminal case brought by the Department of Justice in its decision to end the prosecution
- The request, if granted, would end one of the most high-profile crypto enforcement actions to date
The U.S. Securities and Exchange Commission (SEC) has moved to dismiss its lawsuit against cryptocurrency exchange Binance and its founder, Changpeng Zhao, bringing a dramatic close to the headline-grabbing legal saga. The agency cited the November 2023 guilty plea and settlement in the criminal case brought by the U.S. Department of Justice, which included a multibillion-dollar resolution and major compliance reforms. The decision ends a case which has been running for almost two years and saw Binance hand over $4.3 billion in penalties and Zhao face four months in prison.
Two-Year Case to End With a Whimper
The SEC originally sued Binance in June 2023, alleging the exchange operated as an unregistered securities platform and misled investors. The case ran in parallel with a criminal investigation by the Department of Justice, which concluded in late 2023 with Binance agreeing to pay over $4.3 billion in penalties and Zhao pleading guilty to violating the Bank Secrecy Act. Zhao later stepped down as CEO and was sentenced to four months in prison.
The SEC’s case was one of several actions aimed at crypto exchanges as part of a broader regulatory crackdown, with Binance seen as the jewel in its regulatory crown, given its presence as the world’s biggest crypto exchange. Binance had continued to challenge the SEC’s jurisdiction, arguing many of the tokens listed on its platform were not securities.
SEC Satisfied with $4.3 Billion Settlement
The case was paused in February following the creation of the Crypto Task Force, and in the filing submitted on May 29, 2025, the SEC folded
The Commission believes that the relief it obtained in the parallel criminal proceeding—including Binance’s agreement to significant compliance undertakings—appropriately furthers the public interest.
The agency emphasized that continued litigation would be “duplicative” and that dismissal was “in the interest of judicial economy.”
The document noted that Zhao’s guilty plea and Binance’s sweeping compliance overhaul “render further prosecution by the Commission unnecessary,” particularly as the company had agreed to an independent monitor and extensive reporting obligations.
The proposed dismissal would still require court approval, but there is little reason to believe this won’t be granted. When signed off, it will mark a significant retreat by the SEC after years of aggressive enforcement actions against crypto firms under the Gary Gensler regime. However, the agency made clear that the dismissal would be “without prejudice,” meaning it retains the right to bring similar claims in the future should Binance violate securities laws again.
