SEC Plans to Drop Lawsuit Against Coinbase

The U.S. Securities and Exchange Commission (SEC) is preparing to drop its lawsuit against Coinbase.

According to reports, the case, which started in 2023, claimed that Coinbase was running an exchange without proper registration and offering unapproved investments.

SEC to Dismiss Coinbase Suit

Notably, the firm pushed back against the litigation for nearly two years. One of their major arguments has been that the agency did not provide clear rules for digital asset firms in the country. 

Similarly, in one court proceeding, a U.S. court criticized the regulatory agency’s approach to crypto regulation. They asserted, “We properly remand to the SEC to explain itself; it should not give yet another poor explanation in an already-long line of them.” 

Furthermore, Coinbase’s Chief Legal Officer, Paul Grewal, made it clear to the public that the entity had no intention of settling. In his words, “There will be no settlement or compromise – a wrong will simply be made right,”

In addition, Coinbase CEO Brian Armstrong shared that confirmation is expected next week.

“We’ve always maintained that we were right on the facts and the law, and today’s announcement confirms that this case should never have been filed in the first place. This is a victory not just for Coinbase but for our customers, the United States, and individual freedom.” 

“Following this development, the decision to dismiss the lawsuit is now in the hands of SEC leadership, led by interim Chair Mark Uyeda. 

A Shift in Crypto Regulation

More importantly, the move to drop the suit shows a change in the agency’s perspectives under President Joe Biden. For context, in the Biden and Harris-led government, former SEC Chair Gary Gensler took an aggressive position on crypto enforcement. The agency targeted major exchanges like Coinbase and Binance. 

However, with acting Chairman Uyeda heading the security body, the focus appears to be different. In related news, the security agency has also decided to pause its legal battle with Binance, another major crypto exchange under scrutiny. 

Reports earlier this week revealed that the case will be put on hold for the next 60 days. This latest development has also led to a major change for Binance customers in the U.S. Binance.US users can deposit and withdraw U.S. dollars with zero fees through bank transfers (ACH) for the first time in months. Other services, including buying, selling, and trading over 160 cryptocurrencies, remain fully accessible.

What This Means for Crypto’s Future

For now, Coinbase and the crypto industry might see this as a big win. It could make crypto companies feel more confident about running their businesses without always worrying about legal trouble.  

But there are still questions about what the SEC plans to do in the long run. Even though this looks like a step back, people in the industry are still waiting to see if the SEC will set clearer rules.