Coinbase has announced a significant development in its ongoing conflict with the Securities Exchange Commission (SEC), claiming that the regulator has agreed to dismiss its enforcement case against the crypto exchange.
Paul Grewal, Coinbase’s chief legal officer, stated that SEC staff have agreed in principle to drop the case, describing it as a step toward “righting a major wrong.” However, this resolution still requires the approval of the SEC commissioners.
The SEC sued Coinbase in 2023, alleging that the company operated its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency. The complaint claimed that Coinbase unlawfully profited from buying and selling crypto asset securities since at least 2019.
With a shift in leadership at the SEC and Donald Trump back in the White House, regulators are re-evaluating their stance on the crypto industry and the classification of tokens as securities.
On social media, Coinbase CEO Brian Armstrong expressed his relief, stating that this development is “hugely vindicating,” especially considering the doubts surrounding his decision to engage in litigation with the SEC.
Grewal criticized the “political leadership” at the SEC under Gary Gensler, arguing that the commission overstepped its authority in its attempts to regulate the crypto sector.
After incurring substantial legal costs and dedicating significant employee resources, Coinbase believes it has successfully protected its customers’ rights and held the SEC accountable for its actions.
The company has also been active in influencing regulatory discussions in Washington, donating tens of millions to a political action committee that supports pro-crypto candidates in the lead-up to recent elections. Armstrong attributed the regulatory shift to the Trump administration’s election victory and the departure of Gensler, whom he accuses of leading the unlawful actions against the firm.