The U.S. Securities and Exchange Commission (SEC) has voluntarily dismissed its lawsuit against Binance, the world's largest cryptocurrency exchange, with prejudice, meaning the agancy cannot refile the same claims in any court of law.
SEC, Binance, and Binance founder Changpeng Zhao have signed a joint stipulation of dismissal filed in the Washington, D.C., federal court. That is, they've all agreed mutually to end the lawsuit against Zhao and his crypto exchange. The agreement was signed by attorneys representing all parties.
However, it's important to note that this is not the first time SEC is dismissing lawsuit case against Crypto platforms. It's worth noting that the agancy previously dismissed case against Coinbase exchange. The agancy accused Coinbase that it was facilitating trades in 13 tokens classified as unregistered securities.
According to Binance, the dismissal of the lawsuit against Binance was appropriate "in the exercise of its discretion and as a policy matter". That is to say, the agency chose to end the case based on its authority to prioritize and manage its enforcement actions.
In a statement, one of Binance's insider called the dismissal a pivotal milestone. He expressed appreciation to SEC Chairman Paul Atkins and the Trump administration for acknowledging that heavy-handed enforcement stifles technological advancement in the crypto industry.
We're deeply grateful to (SEC) Chairman Paul Atkins and the Trump administration for recognizing that innovation can't thrive under regulation by enforcement, Binance spokesman said.
Why SEC sued Binance
In 2023, SEC filed a lawsuit against Binance and Zhao for operating an unregistered securities exchange and violating U.S. securities laws. The SEC's 136-page complaint outlined 13 charges against Binance Holdings Ltd., its U.S. affiliate BAM Trading Services Inc. (Binance.US), and founder Changpeng Zhao.
SEC believed that Binance was artificially inflating trading volumes, operating unregistered exchanges, diverting and mishandling customer funds and misleading investors about its surveillance controls. The agency also charged Binance for illegally facilitating of multiple cryptocurrency tokens' trades that SEC officials under President Joe Biden’s administration believed required registration as securities.
However, it's important to know that SEC wasn't just doing these for fun. All the allegations on Crypto platforms and exchanges were part of agancy 's crackdown on crypto industry following the collapse of FTX. The SEC stances that most cryptocurrencies, except Bitcoin (BTC), are securities under its jurisdiction.
