S.E.C. Drops Lawsuit Against Binance, a Crypto Exchange
The Securities and Exchange Commission announced on Thursday that it was dismissing a lawsuit filed two years ago against Binance, a giant cryptocurrency exchange, and its founder, Changpeng Zhao. The S.E.C. had accused Binance and Mr. Zhao of misleading regulators about their operations in the United States and mishandling customer funds.
This move is part of a larger trend of the S.E.C. easing its regulatory grip on the crypto industry. The commission has dismissed more than a dozen lawsuits or investigations against crypto firms since February, when it requested a federal judge to stay the litigation against Binance as it reassessed its regulatory approach.
The dismissal notice, a four-page document, stated that the regulator was dropping the litigation “in the exercise of its discretion and as a policy matter.” This decision is significant given Mr. Zhao’s prominence in the crypto industry as a multibillionaire.
Mr. Zhao, also known as C.Z., a Chinese-born Canadian, had pleaded guilty in November 2023 to violating federal money-laundering charges. Despite serving only four months in federal prison, his financial empire remains largely intact.
The dismissal comes as the crypto industry receives backing from the Trump administration. World Liberty Financial, a crypto firm founded by President Trump’s family, recently announced a $2 billion business deal between Binance and MGX, an Abu Dhabi-backed fund. Executives from World Liberty Financial met with Mr. Zhao to facilitate this deal.
President Trump, who was once critical of the crypto industry, has reversed his stance. During his presidential campaign last year, he vowed to let the industry flourish and roll back much of the S.E.C.’s regulatory enforcement agenda. The Trump family has become major financial backers of the crypto industry through various ventures.
Critics argue that the Trump family’s involvement in crypto poses a potential conflict of interest, given the S.E.C.’s moves to ease digital asset regulations. The president hosted a dinner at his Virginia golf club last week, where the highest-paying customers of his personal cryptocurrency, known as $TRUMP, were in attendance. This event helped promote sales of the memecoin.
The Trump family’s financial dealings in the crypto space are extensive. American Bitcoin, a crypto firm co-founded by Eric Trump, plans to go public. Additionally, Trump Media & Technology Group, the president’s social media company, raised $2.5 billion from investors to buy Bitcoin as an investment strategy. Mr. Trump is the company’s largest shareholder, with a stake worth over $2 billion.
David Yaffe-Bellany contributed to this report. Matthew Goldstein, a Times reporter, covers Wall Street, white-collar crime, and housing issues.
