SEC Drops Lawsuit Against Crypto Company Binance and Founder Changpeng Zhao

The Securities and Exchange Commission (SEC) said Thursday (May 29) that it has dismissed its civil enforcement action against Binance entities and Binance founder Changpeng Zhao.

The agency filed a joint stipulation with the defendants — Binance Holdings Limited, BAM Trading Services, BAM Management US Holdings and Zhao — to dismiss, with prejudice, the civil enforcement action, the SEC said in a Thursday litigation release.

The SEC said in the release that it determined that this dismissal is appropriate “in the exercise of its discretion and as a policy matter” and that its decision in this case “does not necessarily reflect the Commission’s position on any other litigation or proceeding.”

The agency filed the charges in June 2023, alleging that the crypto asset trading platform committed a variety of securities law violations, PYMNTS reported at the time.

Binance said in a Thursday post on X that the SEC’s dismissal of the case against it is a “huge win for crypto.”

“Thank you to Chairman [Paul S. Atkins] & the Trump team for pushing back against regulation by enforcement,” Binance said in the post. “U.S. innovation is back on track — and it’s just the beginning.”

Binance.US said in a Thursday post on X: “This outcome confirms what we have always known: that we did not violate U.S. securities laws.”

In a Thursday blog post, Binance.US said that with new leadership at the SEC, under Chairman Atkins, “a meaningful shift is underway.”

“His commitment to restoring the agency’s historic role of ensuring market integrity through fair and impartial enforcement is a welcome change,” Binance.US said in the blog post. “Similarly, a new chapter now begins for Binance.US.”

The SEC filed 13 charges against Binance and Zhao on June 5, 2023, alleging that the crypto asset trading platform committed a variety of securities law violations.

The agency’s charges included operating as unregistered exchanges, brokers, dealers and clearing agencies; making unregistered offers and sales of crypto assets; failing to restrict U.S. investors from accessing Binance.com; and misleading investors.

Gary Gensler, who was chair of the SEC at the time, said in a June 2023 press release: “Through 13 charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure and calculated evasion of the law.”

Binance said on the day the charges were announced that it was “disappointed” with the SEC’s decision to file the charges, because the company had cooperated with the regulator’s investigations, and that it would “defend our platform vigorously.”