YEREVAN (CoinChapter.com) — The U.S. Securities and Exchange Commission (SEC) agreed to drop its lawsuit against Coinbase after months of legal action. The decision still needs final approval from the SEC commissioners, but an official announcement is expected next week. The Coinbase case has had significant impacts on the crypto industry in the U.S.
The lawsuit in question began in June 2023. The SEC accused Coinbase of operating as an unregistered securities exchange, broker, and clearing agency. Specific tokens listed by Coinbase, such as Solana (SOL), Cardano (ADA), and Polygon (MATIC), were classified by the SEC as unregistered securities. Additionally, the SEC stated Coinbase’s staking program was an investment contract, and therefore, a security.
SEC Charges Coinbase for Operating as an Unregistered Securities Exchange and Staking Violations. Source: SEC on XCoinbase opposed these claims from the start, arguing that its business was transparent and lawful. The company emphasized that the SEC had approved its business model during Coinbase’s public listing on Nasdaq in April 2021.
Coinbase CEO Brian Armstrong Comments on SEC Decision
Coinbase CEO Brian Armstrong commented on the decision, saying:
“If this goes through, it’s a really big deal, not just for us, but for the whole crypto industry. The 50 million Americans who hold crypto, and I think for the rest of the world because this is an important signal about where things are going.”
Armstrong’s comment conveys how critical the new development is for the crypto industry. Coinbase had repeatedly argued that the SEC lawsuit was unjustified. The company stated that it had always operated transparently.
Coinbase CEO Brian Armstrong Reacts to SEC Dropping Lawsuit Against the Exchange. Source: Coinbase on XThroughout the lawsuit, Coinbase maintained that the SEC had previously reviewed and approved its public listing documents. This raised questions about why the lawsuit was filed in the first place.
Shift in SEC’s Approach to Crypto Regulation
The SEC’s decision to drop the lawsuit shows a significant shift in the Commission’s approach to crypto regulation. The agency, now under Republican commissioners Mark Uyeda and Hester Peirce, appears more willing to work with the crypto industry. This is a change from past actions that focused heavily on enforcement.
The SEC lawsuit against Coinbase was part of the Commissions broader actions against the crypto market. Similar enforcement was seen against other exchanges, including Binance. The SEC had argued that these exchanges operated as unregistered securities brokers, causing frustration and regulatory confusion in the crypto industry.
Now, the decision to drop the Coinbase lawsuit may point toward a more cooperative approach. It suggests the possibility of clearer regulatory clarity.
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