In the latest reversal of the cantankerous policies of former United States Securities and Exchange Commission Chair Gary Gensler - who officials in the crypto industry complained had sought to regulate the industry to death through enforcement actions - the SEC has agreed to dismiss the lawsuit against centralized exchange firm Coinbase, accusing the company of operating as an unregistered securities broker.
According to an announcement from Coinbase, the lawsuit dismissal is still subject to approval by an SEC commissioner before it is officially withdrawn.
Dismissing the Coinbase lawsuit still requires a commission vote. The company expects that to happen next week, Paul Grewal, Coinbase’s chief legal officer said.
Coinbase CEO Brian Armstrong said:
"If this goes through, it's a really big deal, not just for us, but for the whole crypto industry. The 50 million Americans who hold crypto, and I think for the rest of the world because this is an important signal about where things are going."
The SEC sued Coinbase in June 2023 amid a torrent of litigation against the crypto industry, attempting to frame many firms and projects as either unregistered securities brokers or securities in and of themselves — placing heavy regulatory and financial pressure on the industry.
The Wall Street Journal reports that Acting SEC Chairman Mark Uyeda said Thursday that the unit would have a broader remit and “deploy enforcement resources judiciously,” including investigating fraud involving crypto assets. The Coinbase lawsuit didn’t involve any fraud claims.
Uyeda said last month that a new SEC task force is considering how to move away from Gensler’s approach toward the crypto market.
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Last week, the SEC filed a request to put a similar case against Binance on hold, citing the pending development of a regulatory framework for digital assets under President Donald Trump’s crypto-friendly administration.
“It’s a great day for Coinbase and for crypto,” said Grewal.
“We were committed to defending it [the lawsuit] to the gates of hell, for as long as it took and for as much money as it took.”
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The SEC complaint will be dismissed with prejudice, which means the agency can’t refile it, Coinbase said in a statement.
Paul Atkins, the pro-crypto advocate nominated by Trump to head the SEC, hasn’t been confirmed yet.
Goldman Sachs crypto team has noted a sentiment shift across the crypto-market following the US presidential elections, as the new administration signaled its support for the industry.
Here is a summary of the key headlines:
While the new US administration has sent a strong signal on its commitment towards reshaping the digital asset industry, these announcements have yet to materialize into the necessary policy implementation.