SEC to Close Court Battle with Coinbase
The US Securities and Exchange Commission (SEC) is to drop its court case against Coinbase, a turning point in the agency’s cryptocurrency regulatory approach. The lawsuit that accused the digital currency exchange of breaking securities rules was among the most prominent actions the agency ever took against the sector.
Coinbase indicated that the SEC plans to petition for dismissal subject to authorization by the leadership of the agency. CEO Brian Armstrong anticipates receiving the decision’s confirmation in about a week.
A Case of Landmark Proportions Under the Gensler-led SEC
In 2023, the SEC filed a lawsuit against Coinbase, charging that it was running an unregistered securities exchange and selling unregistered securities. The suit, brought under former SEC Chairman Gary Gensler, was a significant step in the agency’s larger crackdown on the crypto industry.
Coinbase, however, vigorously denied the allegations and countersued the SEC, demanding regulatory clarity. The company argued that the SEC’s legal framework was outdated and did not provide clear rules for crypto firms operating in the U.S.
A Major Shift in Crypto Regulation
Paul Grewal, Coinbase’s Chief Legal Officer, confirmed the SEC’s plan to drop the case, emphasizing that there would be no settlement. “There will be no settlement or compromise – a wrong will simply be made right,” Grewal stated.
This decision reflects a broader change in the SEC’s approach under interim Chair Mark Uyeda and President Joe Biden’s administration. The agency’s stance appears to be shifting away from aggressive enforcement toward regulatory reform and industry collaboration.
Impact on the Crypto Industry
The SEC’s reversal on Coinbase is the first significant enforcement action set to be withdrawn since President Trump departed. The agency has also suspended court proceedings against Binance, awaiting a resolution with the newly established Crypto Task Force.
For Coinbase, dismissal of the suit is a giant victory. “We’ve argued for a long time that we were right on the facts and the law”, the company said. “Today’s news ensures that this lawsuit never should have been filed in the first place.”
With regulatory uncertainty easing, the crypto community sees this as a step towards clearer regulations and more balanced oversight in the U.S.
