Coinbase Says SEC Is Close to Dismissing Enforcement Case

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Olga Kharif and Sonali Basak

Fri, Feb 21, 2025, 9:47 AM 3 min read

The decision is the latest retreat from the policies of former SEC Chair Gary Gensler, who officials in the crypto industry complained had sought to regulate the industry through enforcement actions. Last week, the SEC filed a request to put a similar case against Binance on hold, citing the pending development of a regulatory framework for digital assets under President Donald Trump’s crypto-friendly administration.

The SEC complaint will be dismissed with prejudice, which means the agency can’t refile it, Coinbase said in a statement. Paul Atkins, the pro-crypto advocate nominated by Trump to head the SEC, hasn’t been confirmed yet. A spokesperson for the SEC declined to comment.

In a post on the social-media platform X, Coinbase Chief Executive Officer Brian Armstrong said that the dismissal will result in no fines and no changes to Coinbase’s business.

New Regime

Coinbase was among many crypto firms that flexed their muscle in Washington during the most recent campaign season, donating millions to political action committees tasked with electing pro-crypto congressional candidates. The company also pledged $1 million to Trump’s inaugural committee, and recently added Chris LaCivita, who was co-campaign manager for Trump’s presidential campaign, to its global advisory council. Armstrong, meanwhile, has spoken with Trump.

The SEC sued Coinbase in June 2023 as part of a broad crackdown on the digital-asset industry in the aftermath of the collapse of crypto exchange FTX. The SEC accused the company of running an illegal exchange, broker and clearing agency. Gensler had repeatedly argued that most tokens are subject to SEC oversight and that swaths of the industry have been breaking the law. At the same time, US regulators warned banks to steer clear of crypto because of potential risks to the financial system, making it harder for US citizens to invest.

“Our ending the case will offer a template for the SEC to resolve other cases as well,” Paul Grewal, chief legal officer at Coinbase, said in an interview.

The dismissal removes a huge overhang from Coinbase, with some analysts saying the company may have had to scale back its coin listings if it lost the SEC case. Now the company can list more tokens, as well as refocus its resources from filing legal briefs to putting out new products, Grewal said.

“We do think this event fully removes the key litigation overhang that was still somewhat lingering; although, the risk has become increasingly less prominent in investor conversations since the election,” JPMorgan analysts said in a Friday note.

The company spent more than $50 million on outside law firms and other advisers to fight the case, Grewal said Friday on Bloomberg Television.

“I think with this announcement, that the case is over, you are going to see Coinbase doubling and tripling down our efforts to bring new products and services to market,” Grewal said. “We think the sky is the limit at this point.”

Coinbase just reported a blowout fourth quarter, with revenue more than doubling and profit increasing more than forecast during the Trump-fueled crypto rally.

Now Coinbase and the industry are working with Congress and regulators on new rules governing crypto stablecoins and digital-asset market structure that would add clarity for the industry. Coinbase still has several active court cases related to the dispute with the SEC, but hopes to “address all of that in short order,” Grewal said.

“I am hoping now that we have the cloud of this litigation lifted, Coinbase and other companies can focus on drafting rules,” Grewal said. “The Gensler lawsuits made this impossible.”

(Updates with JPMorgan’s comments.)

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