Unusual Whales

SEC drops Coinbase, COIN, lawsuit

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SEC Drops Coinbase Lawsuit, Marking a Major Shift for Crypto Regulation

Coinbase, the largest cryptocurrency trading platform, announced Friday that the SEC has dropped its enforcement case against the company, sending its stock price higher in early trading.

The decision, which still requires final approval from the SEC’s commissioners, signals a changing regulatory landscape under the new administration, which has positioned itself as more crypto-friendly.

A ‘Wrong Made Right’

“There will be no settlement or compromise—a wrong will simply be made right,” Coinbase Chief Legal Officer Paul Grewal said in a post on X.

Coinbase CEO Brian Armstrong also reacted, calling the move “hugely vindicating” after his controversial decision to fight the SEC in court in 2023.

SEC’s Case Against Coinbase

The SEC originally sued Coinbase in June 2023, accusing it of:

  • Operating as an unregistered securities exchange, broker, and clearing agency
  • Failing to properly register its crypto-staking program

Coinbase maintained that these allegations were part of the previous administration’s aggressive crackdown on crypto, which it viewed as unjustified government overreach.

"After millions in legal fees, years of litigation, and countless employee hours, we’ve successfully defended our customers and held the SEC accountable," Coinbase stated in its announcement.

A New Era for Crypto in the U.S.?

Industry leaders say the dismissal marks a turning point for cryptocurrency regulation in the U.S.

Alan Orwick, cofounder of Quai Network, told Sherwood News that the decision proves the prior administration was wrong about many cryptocurrencies.

“The SEC has spent years and millions of taxpayer dollars trying to apply outdated securities laws to an entirely new asset class,” Orwick said. “This is an opportunity to rebuild crypto’s reputation and unlock a new era of innovation.”

Ben Kurland, CEO of DYOR, echoed this sentiment but cautioned that the industry still lacks a clear regulatory framework, leaving companies uncertain about the future.

“This is a defining moment—but it’s not a victory lap just yet,” Kurland said.