The Securities and Exchange Commission has agreed to drop its lawsuit against Coinbase, following what the crypto exchange said was a change in “political leadership” at the agency, which accused Coinbase of failing to register as a securities exchange under the Biden administration.
The crypto exchange suggested a change in “political leadership” shifted the regulatory agency’s ... [+]
Paul Grewal, Coinbase’s chief legal officer, wrote in a blog post Friday saying SEC officials have agreed “in principle” to dismiss the agency’s lawsuit against Coinbase.
The SEC sued Coinbase—the largest crypto firm in the U.S.—in Manhattan federal court in 2023, alleging at least 13 crypto assets sold by the crypto exchange should have been registered as securities before they were offered publicly.
“What changed over those two years was the political leadership at the SEC,” Grewal wrote, appearing to reference the lawsuit being filed under the Biden administration and a shift in oversight under President Donald Trump, who has promised to lessen the regulatory burdens facing the industry.
Grewal told the Wall Street Journal that SEC officials will likely vote next week to dismiss the agency’s lawsuit (Coinbase did not immediately respond to a request for comment).
The SEC declined to comment to Forbes.
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Shares of Coinbase rose 4.5% in premarket trading following Grewal’s blog post, raising the company’s stock price to just over $268.
The SEC targeted several cryptocurrency firms under the Biden administration, including lawsuits filed against Coinbase, Binance and Kraken, among others. Regulators pushed for more oversight of the industry, claiming crypto assets sold by crypto exchanges were securities that should be registered under the SEC’s umbrella. Coinbase—which went public in 2021—disputed the SEC’s claims and accused the agency of “hurting America’s economic competitiveness.” A federal district court declined to toss the SEC’s case against Coinbase in March 2024, and the crypto firm appealed the ruling in January. The SEC’s lawsuits against Binance and Kraken are ongoing, though the SEC has requested its case against Binance be paused.
In the lead-up to his inauguration, Trump indicated he would use his executive powers to reduce regulatory burdens facing crypto firms. He suggested he would create a new crypto advisory council, and Trump reportedly planned to unveil an executive order declaring cryptocurrency a policy priority while advising agencies to work with the industry. Acting SEC chair Mark Uyeda said earlier this week a task force to oversee the crypto industry—established by former SEC chair Gary Gensler—would be cut down, and a new task force is reportedly moving away from Gensler’s approach.