Coinbase Says S.E.C. Will Drop Crypto Lawsuit
Coinbase, a prominent cryptocurrency exchange, announced on Friday that the Securities and Exchange Commission (S.E.C.) has agreed to drop its lawsuit against the company. This development could signal a significant shift in the regulatory landscape surrounding the crypto industry.
The announcement, made in a post on Coinbase’s website and in a regulatory filing, indicated that the agreement in principle with the S.E.C. would result in the lawsuit’s withdrawal, without any financial penalties for Coinbase. Such a settlement, if finalized, would represent a notable reversal for the agency, which has been actively pursuing legal actions against various crypto firms for several years.
The S.E.C. initiated the lawsuit against Coinbase in 2023. The agency’s core argument was that the digital currencies traded on Coinbase’s platform were unregistered securities, potentially exposing consumers to financial risks.
According to the announcement, any settlement leading to the lawsuit’s dismissal would require approval from the S.E.C.’s commissioners. A spokesperson for the agency has yet to release an official comment on Coinbase’s announcement.
The lawsuit was one of several major legal actions that the S.E.C. has brought against key players in the crypto industry, alleging that they were operating outside of existing regulations. A victory for the government could have severely impacted Coinbase, a publicly traded company with an approximate value of $65 billion, and possibly destabilized the broader crypto market.
This potential dismissal could be the most substantial win for the crypto industry since President Trump assumed office last month, having pledged to reverse the regulatory crackdown on crypto that was implemented during the Biden administration under the previous leadership of the S.E.C. chair, Gary Gensler. Furthermore, it highlights the increasing influence of wealthy technology executives in Washington, who provided significant financial support to Mr. Trump’s campaign with the anticipation of more favorable regulations.
