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One of Crypto’s Biggest Legal Battles Ends

In a landmark development for the global cryptocurrency sector, the U.S. Securities and Exchange Commission (SEC) has officially ended its legal case against Binance and its founder, Changpeng Zhao (CZ), marking the closure of one of the most aggressive crypto enforcement actions to date.

The dismissal, filed jointly by the SEC and Binance in the U.S. District Court for the District of Columbia, was granted with prejudice—a legal term that ensures the charges cannot be refiled. This decision comes two years after the SEC accused Binance of illegally offering services to U.S. users, manipulating trade volumes, and commingling customer funds.

Background: Binance's Regulatory Struggles

The SEC’s lawsuit against Binance, initiated in June 2023, was part of a broader crackdown on the crypto industry under former Chair Gary Gensler. Binance, the world’s largest crypto exchange by trading volume, was alleged to have violated U.S. securities laws, particularly by offering access to unregistered securities and enabling U.S.-based users to bypass restrictions.

Prior to this dismissal, Binance reached a $4.3 billion settlement with the U.S. Department of Justice, Treasury, and other regulators in late 2023. As part of that agreement, CZ pleaded guilty to violating U.S. anti-money laundering laws and stepped down as CEO, though he retained a significant portion of his wealth and avoided jail time.

Binance’s Global Realignment and Strategic Partnerships

Following regulatory heat in the U.S., Binance has shifted its focus internationally. The company has announced a $2 billion funding deal with the Emirati state fund MGX, entirely in USD1, a stablecoin recently launched by the Trump-affiliated World Liberty Financial (WLF).

WLF, which aims to create the world’s first decentralized crypto bank, claims that 75% of its profits will be funneled to entities connected to the Trump family. This partnership places Binance in the center of a politically-charged crypto revival.

Meanwhile, Binance and WLF are expanding operations in Pakistan, where CZ was recently appointed as an advisor to the government’s new Crypto Council, a state-backed policy body shaping national digital asset regulation. WLF co-founder Zack Witkoff, son of U.S. Middle East envoy Steve Witkoff, has reportedly finalized key agreements with Pakistan’s finance ministry.

Regulatory Shift Under New SEC Leadership

This legal retreat by the SEC underscores a strategic regulatory pivot in Washington. Commissioner Hester Peirce, in comments to CNBC, acknowledged that the SEC had operated in a gray area for years when it came to crypto oversight.

"We didn’t have a clear set of rules," Peirce said. "Now, we’re stepping back to write those rules and enforce them fairly."

The current SEC leadership, under newly appointed Chair Paul Atkins, has favored engagement over enforcement. Since January 2025, the agency has:

• Dissolved its crypto enforcement division
• Revoked Staff Accounting Bulletin 121, which required banks to treat digital assets as liabilities on balance sheets
• Clarified that most meme coins are not securities, in a move that boosted the Trump-affiliated $TRUMP token, which now has a market cap of $2.4 billion

These developments signal a reconciliation between crypto firms and U.S. regulators, especially under a Trump-aligned administration that has positioned itself as pro-crypto.

Industry Implications: What’s Next for Binance and Crypto?

With the regulatory cloud lifting, Binance is set to reassert its dominance in the global crypto market. The firm has scaled back U.S. operations but is investing heavily in Middle Eastern and South Asian markets, where crypto adoption is surging.

Legal clarity could also lead to increased institutional investment, as hedge funds and asset managers have long sought stable frameworks to enter the crypto space.

Yet, SEC Commissioner Peirce warned the industry not to misinterpret the dismissal:

"This is not a free pass for bad actors to exploit crypto investors."

The SEC’s softened stance doesn't mean regulatory oversight has disappeared—it means it's evolving.

Final Thoughts: A Turning Point for U.S. Crypto Policy

The SEC’s dismissal of its lawsuit against Binance may mark the end of a regulatory era and the beginning of a more collaborative phase between crypto innovators and Washington. With geopolitical dynamics, new leadership, and major financial backing reshaping the industry, this decision is more than a legal technicality—it's a symbol of the changing tides in global crypto governance.

As Binance regains ground and policymakers push for clearer rules, investors and industry insiders should brace for a new chapter in crypto regulation—one focused more on integration than isolation.