The US Securities and Exchange Commission SEC asked a federal judge to drop their civil lawsuit against Binance and founder Changpeng ‘CZ’ Zhao in a four-page filing on May 29. The letter informing me about being dismissed offers neither any money nor explains if it is with or without prejudice.
Effect of the Task Force
In February, Judge Jackson put the case on hold for 60 days because both parties claimed the new SEC crypto task force under Commissioner Peirce could influence the case’s outcome. The group looked into whether the existing securities rules could be applied to digital-asset platforms.
Binance is celebrating its achievement.
In a statement on X, Binance lauded the decision as a big step for crypto and thanked Chairman Atkins and the Trump administration for speaking out against more crypto regulations. According to the company, American innovation has picked up again and it’s only the beginning of what’s to come.
Regular Requirements for Compliance
Though the main case was dropped, Binance.US needs to provide quarterly reports and have third-party audits of its customers’ wallets. If enforcement is needed again, a new complaint has to be filed.
SEC’s Original Complaint
Initially, the SEC said in its June 2023 complaint that Binance and Binance. US did not register with the agency as securities exchanges. Officials reported that Binance was boosting trading data with wash trades, moving customer money to companies linked to Zhao. Furthermore, they misled people about the security systems, while Binance said it did nothing wrong.
