Coinbase Lawsuit Dropped by SEC, Signaling Shift in Crypto Regulation

New York, NY - Coinbase, the largest US-based cryptocurrency exchange, announced on Friday that the Securities and Exchange Commission (SEC) plans to withdraw its lawsuit against the company. This move signals a potential shift in the Trump administration's approach to cryptocurrency regulation.

In a release titled "Righting a Major Wrong," Coinbase stated that the SEC staff had agreed to dismiss the suit, which accused the exchange of operating as an unregistered securities broker. The agency is yet to formally vote on the withdrawal.

"This decision is a significant step towards regulatory clarity for the crypto industry," said Coinbase CEO Brian Armstrong. "It shows that the previous administration's attempts to unlawfully target this sector have been overturned."

Trump's Pro-Crypto Stance

The decision to drop the lawsuit aligns with President Donald Trump's campaign promise to roll back strict crypto industry enforcement. Trump has pledged to make the US the "crypto capital of the world" and has even launched his own meme coin.

SEC's Historical Position

In the original lawsuit, the SEC claimed Coinbase's actions deprived investors of vital protections, including fraud prevention, proper disclosure, and SEC oversight. The agency has not yet categorized Bitcoin as a security.

Crypto Industry Relief

The crypto industry has criticized the SEC's previous stance under Chair Gary Gensler, accusing it of adopting an overly critical approach while failing to provide clear regulatory guidance. Lawsuits against two other exchanges, Binance and Kraken, are still pending.

Coinbase Response

CEO Armstrong emphasized that regulators must enforce existing laws but cannot create new ones arbitrarily or exploit legal ambiguities. He also criticized the Biden administration's previous actions towards the crypto industry, stating that "it turned out to be a fake offer."

Market Impact

Coinbase shares rose 5% in premarket trading following the announcement. Bitcoin prices also increased by 1%.