The United States Securities and Exchange Commission (SEC) had alleged in 2023 that Coinbase, a leading cryptocurrency exchange, violated regulatory laws by offering investments without proper registration. The lawsuit accused Coinbase of conducting exchange, broker, and clearing agency services illegally within the US. However, Coinbase's CEO, Brian Armstrong, announced that an agreement was reached with the SEC's staff to dismiss the lawsuit without imposing fines or requiring operational changes from Coinbase.
This legal challenge was part of a broader crackdown by the SEC on cryptocurrency firms, led by former chair Gary Gensler until his resignation in January. In response to these actions, President Donald Trump, during his 2024 campaign, pledged to reverse the crackdown if elected. He promised to terminate Gensler on the first day of his presidency to garner support from crypto companies and investors. Armstrong praised the influence of the "crypto voter" in aiding Trump's election victory and acknowledged President Trump's role in his post-election message.
"Since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities" – SEC
Coinbase's chief legal officer, Paul Grewal, emphasized that there would be no settlement or compromise regarding the lawsuit. He stated that "a wrong will simply be made right," reflecting the company's firm stance against the allegations. Grewal further expressed his commitment to advocating for clear regulatory rules that would allow the cryptocurrency industry to prosper in the United States.
"there will be no settlement or compromise– a wrong will simply be made right" – Paul Grewal
"We won't stop fighting until we have the clear rules needed to enable the industry to truly thrive in the United States" – Paul Grewal
While the SEC has yet to officially confirm the dismissal of the lawsuit against Coinbase, a spokesperson declined to comment on the matter. Armstrong described the potential dismissal as "hugely vindicating" and expressed his enthusiasm for collaborating with Congress and SEC staff on future advancements in cryptocurrency regulation.
"I want to give a shout out to all the crypto holders in the US who elected pro-crypto candidates, on both sides of the aisle, to make sure your rights were preserved" – Brian Armstrong
"It turns out the crypto voter is real, and showed up in the millions" – Brian Armstrong
In a related development, the SEC granted a 60-day pause in a similar case against Binance, another major player in the cryptocurrency exchange market. This move indicates potential shifts in regulatory approaches under the changing political landscape.