A US judge rules that SEC charges against Binance, Binance.US, and CZ for violating federal securities laws can proceed, but dismisses secondary sales charges
A federal judge ruled the SEC had plausibly alleged Binance, Binance.US and Changpeng Zhao violated federal securities laws.
Context & Ripple Effects
The decision keeps the SEC dispute alive after Binance, Binance.US and Changpeng Zhao sought dismissal in their 2023 bid to throw out the SEC case. It sits alongside, rather than replaces, Binance’s separate regulatory resolutions, including the CFTC settlement approved in late 2023 and the DOJ case involving Binance and Zhao.
The partial dismissal matters because it narrows one theory while preserving the central securities-law allegations for further litigation. That leaves the legal status of the companies’ conduct to be tested on a more limited set of claims.
First-order effects
- Binance, Binance.US and Zhao must continue defending the surviving SEC claims; the ruling does not resolve liability.
- The SEC loses its secondary-sales charges in this case, reducing the scope of the proceeding even as its principal allegations advance.
Second-order effects
- The split outcome gives other crypto platforms and their counsel a concrete signal that courts may separate platform-specific allegations from broader secondary-sales theories rather than accept or reject an SEC complaint wholesale.
- Binance’s U.S.-facing compliance, governance and legal resources remain under pressure from an active SEC case in addition to the company’s earlier CFTC and DOJ resolutions.
Third-order effects
- If similar rulings persist, U.S. crypto enforcement may be shaped claim by claim, with litigation establishing boundaries for exchange activities more gradually than a single definitive ruling would.
- The pattern points toward regulation through overlapping agency actions and court tests, increasing the premium on operational controls that can withstand scrutiny across securities, derivatives and financial-crime regimes.
The trend: Crypto-market oversight is moving from broad enforcement assertions toward a fragmented, court-tested framework in which individual business activities are assessed under different legal theories.