The U.S. Securities and Exchange Commission (SEC) moved to dismiss its lawsuit against Coinbase, the largest U.S. cryptocurrency exchange, on Thursday, ending a legal dispute as the regulator shifts direction under President . The SEC had sued Coinbase in 2023, accusing it of violating the agency's regulations by enabling trading in at least 13 crypto tokens that should have been registered as securities.
Coinbase contended that unlike traditional investments, crypto assets did not meet the criteria of an investment contract, a stance commonly held in the industry. The lawsuit also addressed Coinbase's "staking" program, which pooled assets for blockchain network verification and provided rewards to customers in exchange for commissions, arguing that the program should have been registered with the SEC.
Furthermore, the SEC filed a lawsuit against Binance in 2023, which was later withdrawn in response to a joint request, highlighting the influence of the SEC's new crypto task force established shortly after the recent change in administration. The Republican officials at the SEC promptly initiated revisions to the agency's crypto policies, preceding the appointment of Trump's preferred SEC chair.
The reconsideration of cases involving crypto companies, especially those that breached SEC regulations without defrauding investors, was widely anticipated. Legal experts indicated an expectation for settlement negotiations by the SEC, considering a mass dismissal of ongoing cases as unprecedented.