The US Securities and Exchange Commission has voluntarily dismissed its civil lawsuit against Binance, the world's largest cryptocurrency exchange, Reuters has reported.

Extending the regulator's new approach to cryptocurrencies since President Donald Trump re-entered the White House, the SEC said dismissing the enforcement case was appropriate “in the exercise of its discretion and as a policy matter”, and did not reflect its view on other cryptocurrency litigation.

It marks a new day for Zhao Changpeng, the former Binance boss, who seven years ago held the promise of millions of dollars in Bermuda investments, but who a year ago was sentenced to four months in prison after pleading guilty to violating US money-laundering laws.

The Bermuda promise came as David Burt, the Premier and Minister of Finance signed a memorandum of understanding with him in 2018.

At the time, the Premier called the MOU “a vote of confidence in Bermuda and the leadership of this government”.

What the latest development means for the once promising Bermuda relationship is yet to be seen. The dismissal of the civil suit is with prejudice, meaning the SEC cannot pursue the case again.

A Binance statement called the dismissal “a landmark moment”, expressing gratitude that the Trump administration recognised that “innovation can't thrive under regulation by enforcement”.

As Reuters reported: “The SEC sued Binance and Zhao in June 2023, accusing the exchange of artificially inflating trading volumes, diverting customer funds and misleading investors about its surveillance controls.

“Binance was also accused of unlawfully facilitating trading of several cryptocurrency tokens that SEC leadership during President Joe Biden's administration believed should have been registered as securities.

“The case was separate from Binance's November 2023 guilty plea and $4.32 billion criminal penalty for violating federal anti-money laundering and sanctions laws through lapses in internal controls.

“Zhao pleaded guilty to anti-money laundering violations, and was released from prison last September after serving a four-month sentence.

“In February, the SEC dismissed a separate enforcement case accusing Coinbase, the largest US cryptocurrency exchange, of arranging trading in at least 13 unregistered tokens.

“The crypto industry has long chafed over regulatory efforts to apply federal securities laws to digital assets, with many companies likening tokens to commodities.”

Classifying tokens as securities would require cryptocurrency companies to register with the SEC and disclose more to investors.

Trump promised during his 2024 White House run to be a “crypto president” and pledged to reverse what had been an industry crackdown. The SEC has since withdrawn or put on hold many cryptocurrency enforcement cases.