The largest U.S. cryptocurrency exchange, Coinbase, announced that the U.S. Securities and Exchange Commission (SEC) agreed to withdraw its lawsuit against the platform, according to a post on the platform’s blog. The final decision depends on approval by the commissioners, but the exchange’s team is optimistic, as reported by RBC Crypto.
The company considers the potential closure of the case a victory for the entire crypto industry and emphasizes the need for clear legislation to prevent abuse by regulators.
“Closing the case will serve as a template for the SEC to resolve other cases,” said Coinbase’s Chief Legal Officer, Paul Grewal.
The SEC filed a lawsuit against Coinbase in 2023, accusing the platform of operating as an unregistered broker, stating that some of the exchange’s services fall under securities regulations.
Coinbase stated that it had always insisted that the lawsuit was unlawful, claiming it had not broken the law. The company also noted that, despite the multimillion-dollar costs of the legal proceedings, it managed to defend customer rights and advocate for clearer regulation of the crypto market in the U.S.
About a week ago, the largest cryptocurrency exchange, Binance, and the SEC jointly approached the court requesting to suspend the lawsuit for 60 days. The SEC lawsuit was filed in June 2023 and included 13 charges, including operating unregistered exchanges, providing brokerage-dealer services, and managing clearing agencies dealing with unregistered securities.
The request for suspension was made in light of the new commission task force aimed at developing a clear regulatory framework for cryptocurrencies. This group was formed after U.S. President Donald Trump’s inauguration on January 20.
Acting Chairman of the U.S. Securities and Exchange Commission, Mark Uyeda, appointed Commissioner Hester Peirce to lead the group, known for her support of crypto innovations and her nickname “Crypto Mom” for her efforts in creating sensible cryptocurrency market regulations.
Under the previous administration, most SEC claims under the leadership of former Chairman Gary Gensler were related to classifying the activities of crypto companies as trading unregistered securities, which is a violation of U.S. securities laws.
In the past few years, the SEC has sent investigation notices to exchanges such as Coinbase, Kraken, and CryptoCom, the NFT marketplace OpenSea, broker Robinhood, the crypto project Immutable, decentralized exchange operators Uniswap, and crypto wallet developer MetaMask—Consensys.
According to Peirce, the process of transforming policy toward cryptocurrencies “will require time, patience, and the involvement of all stakeholders.” The regulator aims to create an environment that protects investors and supports innovation, she noted.