The U.S. Securities and Exchange Commission (SEC) has officially dismissed its high-profile lawsuit against Binance and its founder, Changpeng Zhao. This legal action, initiated in June 2023, accused the crypto exchange of multiple violations, such as offering services to U.S. users without authorization, inflating trading volumes, and commingling customer funds.
The SEC also alleged that Binance enabled trading in unregistered securities — a claim it similarly levied against other platforms like Coinbase and Kraken. The dismissal, filed in a Washington, D.C. court, marks the end of a major chapter in U.S. crypto regulation.
Regulatory Shift Favors Crypto as Binance Expands Global Influence and Political Connections
The dropping of the lawsuit comes during a period of significant shifts in U.S. regulatory policy. The Trump administration has adopted a more crypto-friendly approach, including the shutdown of the Justice Department’s crypto enforcement team and the appointment of a pro-crypto venture capitalist to head the Commodity Futures Trading Commission (CFTC).
These moves reflect a retreat from the previously aggressive oversight of the crypto industry and suggest a broader pivot toward regulatory leniency. By dismissing the case with prejudice, the SEC has also made it clear that these specific charges against Binance cannot be brought again.
Despite legal challenges, Binance continues to expand its global influence. The exchange has formed a notable alliance with World Liberty Financial (WLF), a crypto project with ties to the Trump family. Binance is receiving a $2 billion investment in USD1, a stablecoin launched by WLF.
Both organizations are also increasing their presence in Pakistan, where Zhao has been appointed to a newly formed Crypto Council aimed at shaping national crypto policy. These developments highlight Binance’s efforts to strengthen its geopolitical and financial foothold.
SEC Shifts Toward Clarity and Engagement While Loosening Crypto Regulatory Barriers and Oversight
The dismissal also reflects an internal shift within the SEC. Commissioner Hester Peirce emphasized a new focus on clearer rulemaking rather than aggressive enforcement. Acknowledging past ambiguity, Peirce stated that the agency now seeks to write precise regulations tailored to the crypto sector and enforce them accordingly. While signaling a regulatory softening, she warned that this does not mean fraudulent activity will be tolerated. The agency’s approach is now centered on engagement and structured policy development rather than blanket crackdowns.
Under its new leadership, the SEC has been dismantling key regulatory barriers. This includes overturning the controversial Staff Accounting Bulletin 121, which previously forced banks to report crypto as liabilities. Additionally, updated guidance has clarified that most meme coins do not qualify as securities, benefiting crypto projects linked to the Trump family. Notably, the $TRUMP token has gained significant market traction, with claims that the Trump Organization controls the majority of its $2.4 billion market cap. These developments underscore the growing convergence of crypto and politics in the U.S.
