The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss its lawsuit against Coinbase, the country’s largest crypto exchange, the company announced Friday.
While the decision still requires approval from SEC commissioners, it marks a significant shift in the agency’s regulatory approach, potentially offering relief to the broader crypto industry.
SEC Moves to Drop Coinbase Case
Coinbase revealed today that SEC staff has agreed in principle to withdraw its enforcement action against the exchange, pending commissioner approval.
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The company, which has long challenged the SEC’s regulatory stance on digital assets, called the move a step toward greater clarity in U.S. crypto regulation.
“This is a victory not just for Coinbase, but for our customers, the United States, and individual freedom,” said Paul Grewal, Coinbase’s Chief Legal Officer.
SEC’s Allegations Against Coinbase
In June 2023, the SEC sued Coinbase, alleging the platform operated as an unregistered broker, exchange, and clearing agency.
The regulator also claimed that Coinbase’s staking program amounted to an unregistered securities offering.
Coinbase denied the allegations, arguing it does not list securities and that the SEC’s case lacked merit.
The lawsuit is expected to be formally dismissed following a commission vote next week.
Coinbase shares (COIN) climbed 4.4% to around $270.69 following the announcement, reflecting investor confidence in the company’s regulatory prospects.
SEC’s Broader Crypto Crackdown
The SEC’s decision to drop its lawsuit against Coinbase comes amid a broader reassessment of its crypto enforcement strategy.
In June 2023, the agency sued Binance, alleging it operated as an unregistered securities platform. In February 2025, both sides filed a joint motion to pause proceedings for 60 days, hinting at a potential settlement.
The SEC’s legal battle with Ripple over XRP’s classification also continues, with the agency recently filing an appeal despite leadership changes.
These moves signal a possible shift in regulatory tactics, potentially paving the way for a more structured approach to crypto oversight.
Why This Matters
The SEC’s move eases regulatory risks for Coinbase and signals a potential shift in the agency’s approach to crypto oversight. The decision boosts investor confidence and could set a precedent for future regulatory actions in the sector.
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