The Cryptocurrency Exchange Coinbase said on Friday that the Securities and Exchange Commission had agreed to drop its lawsuit against the company, to cancel a legal cloud about the global crypto industry and a broader retreat by signaling federal regulators.
Coinbase said in a position on its website and in a registration application that it had in principle reached an agreement with the SEC to have the lawsuit withdrawn without any financial fine. If the SEC confirms the proposed settlement, this would be a remarkable reversal by the agency after years of legal fighting against crypto companies.
The SEC complained Coinbase, the largest American crypto company, in 2023 on the basis of the fact that the digital currencies on its platform were not registered effects that make consumers endangered financial damage.
Any regulation that results in a dismissal of the lawsuit would require the approval of the SEC supervisory directors. A spokesperson for the agency refused to comment on the announcement of Coinbase.
The lawsuit was the most important of several that the SEC had filed against large crypto companies, with the argument that they operated outside the law. A victory for the government could have threatened the continued operation of Coinbase, a listed company with a value of around $ 65 billion and decimated the broader cryptomarkt.
The resignation would be the biggest victory for the Crypto industry since President Trump took on last month, and promised to put an end to the performance of the Biden administration against Crypto among the previous SEC chairman, Gary Gensler. And it would underline the growing influence in Washington from the managers of the billionaire technology, who wrote huge checks to support Mr Trump's campaign in the hope of securing the softer regulations.
Paul Grewal, Chief Legal Officer of Coinbase, said in an interview that the agreement was “nothing less than a full victory” – Coinbase would not have to admit misconduct or pay a fine. The agency agreed to reject the case with prejudices, he said, which means that the lawsuit can no longer be set.
“The case disappears as if it had never been submitted,” said Mr. Grewal.
On Friday he discussed the proposed resolution in a blog post entitled 'Righting a Major Wrong'.
Dennis Kelleher, Chief Executive of Better Markets, a non -profit that insists on more transparency on Wall Street, said that the apparent “unilateral surrender” of the sec would undermine the confidence in the ability of the committee to regulate markets and investors to regulate and investors protect.
“The SEC was used to maintain the law without fear or favor, but now prefers the crypto industry and fears billionaire Crypto Kingpins that publicly belittles the agency,” said Mr. Kelleher.
Coinbase works as a marketplace for cryptocurrencies – a platform where investors can easily convert dollars into digital assets such as Bitcoin or Ether. Every time a sale goes through, the company collects a fee.
Coinbase became public in 2021, a milestone for the crypto industry in the United States. The founder and Chief Executive, Brian Armstrong, immediately became one of the richest technical managers in the country.
But the following year the collapse of FTX, one of the best rivals in Coinbase, sent Crypto markets in a Meltdown. Mr. Gensler accelerated a performance against the industry he had started when he took over the desk in 2021.
His legal argument was simple: almost all cryptocurrencies are effects, just like shares and bonds traded on Wall Street. Everyone who offers them must register with the SEC and must follow strict rules to protect investors. He pointed to an age -old Supreme Court who made a statement about what an investment contract was, with the argument that it should rule digital assets.
As a top seller for cryptocurrencies in the United States, Coinbase became one of the primary goals of Mr Gensler. In the case case of 2023, the SEC argued that the company “had increased its interest in increasing its profit about the interests of investors, and about compliance with the law.”
Under Mr Gensler, the Bureau filed similar suits against other top -crypto market sites, such as Binance and Kraken. (Those packs are still being treated.) Crypto-pipelines argued that Mr Gensler used unfair enforcement actions and an outdated Playbook to regulate the fast-growing industry. They lobbyed for federal legislation that would have supervised the industry to the Commodity Futures Trading Commission, a much smaller and less aggressive supervisor than the SEC
A complex legal fight followed, with judges in different areas of law that sometimes issue conflicting opinions about the legal status of cryptocurrencies. Last year, the judge who supervised the Coinbase case rejected a motion from the company to reject the lawsuit, which sets the stage for a legal struggle of years that the Supreme Court could have reached.
But while Crypto companies fought against the SEC in court, the industry also mobilized to reform the political landscape.
Crypto managers threw their support behind Mr Trump, who started his own crypto company last year. Rich Tech investors such as Marc Andreessen, whose venture company is an important investor in Crypto, mentioned Mr Trump's support for digital currencies as an important reason they supported him.
The Crypto industry also wanted to influence the congress: Coinbase was one of the best financiers of Fairshake, a crypto -Super Pac that donated more than $ 130 million to legislative candidates.
Since his victory, Mr. Trump has taken a series of steps to promote the interests of industry. He chose the venture investor David Sacks, a crypto -enthusiastic, as 'crypto and ai czar' from the White House. And he nominated Paul Atkins, a lawyer for effects that consulted for cryptomabins, to lead the sec
While Mr Atkins is waiting for confirmation, Mark T. Uyeda, a Republican Sec Commissioner, leads the office. This month, the SEC has recreated its crypto enforcement efforts and lawyers who had worked on a team of 50 people again to crypto matters.
Mr Gewal, a former federal judge, refused to mention the SEC officers who had negotiated with Coinbase about the resolution of the case. But he said the deal had the “full support of leadership”. Next week, he said, the commissioners of the agency will vote to approve the deal, a process that he described as a formality.
“Our termination of this case on such grim conditions with the SEC delection offers a model and template,” said Mr. Grewal. “I hope that ours will not be the last but rather the first of these cases that falls.”
Some former SEC lawyers, however, expressed their concern about the consequences of the decision.
John Reed Stark, a former SEC enforcement officer and now a regulatory consultant, said it was rare that the committee rejects cases such as the Coinbase One, in which a judge has already rejected a motion to throw away the lawsuit. He said it could influence the moral of the staff on the SEC
“This radical change has never occurred,” said Mr. Stark. “They have already cut the crypto unit in two. Every person who worked in this group is absolutely destroyed. “
