Coinbase Announces the U.S. Securities and Exchange Commission (SEC) Plans to Drop Its Lawsuit Against the Company

The lawsuit, filed in 2023, accused Coinbase of violating securities laws by offering investments that should have been registered under SEC rules.

Coinbase Technologies Inc (NASDAQ:COIN) has announced that the U.S. Securities and Exchange Commission (SEC) will drop its lawsuit against the company.

The lawsuit, filed in March 2023, accused Coinbase of violating securities laws by offering investments that should have been registered under SEC rules.

Coinbase CEO Brian Armstrong shared on Twitter Inc (NYSE:TWTR) late on Friday that the exchange reached an agreement with SEC staff to dismiss the case.

If finalized, this will mean that Coinbase will not have to pay any fines or change how it operates.

Armstrong called this a major victory and a sign that the company was right all along.

Armstrong also credited U.S. crypto voters for supporting pro-crypto candidates in the election, including President Trump, who had promised to reverse strict crypto regulations.

The SEC had accused Coinbase of illegally acting as an exchange, broker, and clearing agency without proper registration. The regulator also alleged that the exchange facilitated the trading of unregistered securities, which it claimed deprived investors of important legal protections.

In June 2023, the SEC argued that Coinbase had made billions of dollars through these activities since at least 2019.

This lawsuit was part of a broader crackdown on crypto firms led by former SEC Chair Gary Gensler, who resigned in January. Gensler had previously filed a similar case against Binance, the world’s largest crypto exchange, which recently received a 60-day pause in its case due to shifting regulations.

In his post, Armstrong criticized Gensler's enforcement actions, stating that the SEC had taken an overly aggressive stance against crypto companies. He also praised Trump's election win, suggesting that the industry now has stronger political support.

Coinbase's chief legal officer, Paul Grewal, also commented on Twitter, saying that the lawsuit’s dismissal is not a settlement or compromise but a correction of an unfair action.

He reaffirmed the company’s commitment to fighting for clear regulations that would allow the crypto industry to thrive in the U.S. Grewal added that Coinbase looks forward to working with Congress and SEC staff to create a better regulatory framework for the industry.