The SEC is dropping its lawsuit against Coinbase, marking a major win for the cryptocurrency exchange and the entire crypto industry. This decision signals a potential shift in the SEC’s approach to crypto regulation.
The SEC Backs Down
After a 20-month legal battle, the SEC’s staff has agreed to withdraw its case against Coinbase. Coinbase CEO Brian Armstrong announced this on X (formerly Twitter), stating that while the SEC Commissioners still need to approve the dismissal, they expect it to happen soon. This is huge news for the crypto world, suggesting a possible change in how the US government handles crypto regulation.
The SEC’s original lawsuit claimed Coinbase was operating as an unregistered securities exchange and illegally selling unregistered securities through its staking program. The case was put on hold earlier this year after a judge granted Coinbase an appeal. This appeal, and the SEC’s subsequent request for more time to respond, fueled speculation about a possible settlement or dismissal.
A Victory for Crypto, and a Call for Legislation
Coinbase’s Chief Legal Officer (CLO), Paul Grewal, celebrated the decision as a victory not just for the company, but for its customers and the principle of individual freedom. He pointed out the irony of the SEC suing Coinbase after allowing the company to go public two years earlier without any changes to its business model. Grewal argued that the lawsuit was politically motivated.
The company is now pushing for clear crypto legislation to prevent future situations where regulators overstep their authority. This sentiment is echoed by Coinbase’s Chief Product Officer (CPO), Faryar Shirzad, who urged Congress to create a balanced regulatory framework that protects consumers while supporting innovation. Coinbase is committed to working with the SEC to shape a better future for the crypto industry in the US.
