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On Friday, Coinbase CEO Brian Armstrong announced that the U.S. Securities and Exchange Commission (SEC) was close to fully dismissing its lawsuit against America’s largest crypto exchange, pending an impending SEC vote.
The SEC filed a lawsuit against Coinbase in 2023, claiming the firm was operating as an unregistered securities exchange. However, in recent weeks, the SEC has begun dialing down lawsuits against prominent crypto firms, the vast majority of which were launched under the previous administration of SEC chair Gary Gensler.
“The SEC can’t bring these same claims against Coinbase again," Wormhole Foundation's General Counsel Cathy Yoon told TheStreet Crypto. "[This] is the loudest indicator that change is indeed happening. While the space still does not have clarity on what constitutes a digital asset.. there is hope that most, if not all, tokens listed on Coinbase are not securities."
Following Gensler’s resignation in January, President Donald Trump has appointed several pro-crypto figures to reshape U.S. regulation of the sector. Trump, who has personal ties to multiple crypto ventures, has pledged strong support for the industry, which donated millions to his re-election campaign.
The crypto sector, which claims to have faced years of regulatory challenges under Gensler's leadership, stands to benefit from Trump’s pro-crypto stance.
Recently, Binance, the world's largest crypto exchange, received a 60-day pause on the SEC's lawsuit against it, and rumors are swirling that other crypto exchanges may soon see their cases ease. "It will be interesting to see if Kraken and Binance get the same treatment [as Coinbase]," said Yoon.
On social media, Coinbase CEO Armstrong struck a defiant, unyielding posture and suggested that the firm had fought an existential battle on behalf of the entire $3.2 trillion industry: “The SEC made it clear to us that the only way to avoid litigation was to delist the many assets they falsely claimed were securities,” Armstrong said. “It was a bullying tactic, pure and simple, driven by Gensler's own political agenda.”
“Caving to their demands could have killed the crypto industry in America,” Armstrong added.
Armstrong said that the company spent tens of millions on fighting the SEC’s case against it, but said it was "hugely vindicating" that it would be resolving the lawsuit without paying any fines or agreeing to any significant changes to the business.
“If we had caved, it would have dramatically limited the scope of which crypto assets were allowed in the US, and pushed the industry further offshore, into the shadows,” Armstrong said.
The firm said it expects a full dismissal of the SEC's case against Coinbase next week.