• Coinbase says the SEC has agreed to dismiss its lawsuit against the US-based crypto exchange.
• The SEC sued Coinbase in 2023 but with Gary Gensler’s exit, the regulator is eyeing better regulatory approach.

US-based crypto exchange Coinbase is set for a landmark development after the Securities and Exchange Commission reportedly agreed to dismiss its own lawsuit against the exchange.

Coinbase announced the huge news in a blog post on Friday, Feb. 21. Coinbase CEO Brian Armstrong also shared the development in an interview with CNBC’s Squawk Box.

“SEC staff has agreed in principle to dismiss its unlawful enforcement case against Coinbase, subject to Commissioner approval – righting a major wrong,” Coinbase chief legal officer Paul Grewal wrote.

Coinbase CEO Brian Armstrong also shared the news via X.

Great news!

After years of litigation, millions of your taxpayer dollars spent, and irreparable harm done to the country, we reached an agreement with SEC staff to dismiss their litigation against Coinbase. Once approved by the Commission (which we’re told to expect next week)… pic.twitter.com/IlnoBs7N6n

— Brian Armstrong (@brian_armstrong) February 21, 2025

SEC vs. Coinbase ending

According to the exchange, the regulator’s decision to withdraw the case follows a settlement that does not involve any financial penalty against Coinbase. The next move is for the SEC commissioners to ratify the agreement and end a major legal hurdle that set the US crypto market back.

“While dismissal will be a major win for the rule of law – and a clear vindication of our position – most of all it will be a win for the entire industry and the 52 million Americans who have owned a digital asset,” Grewal added.

The SEC filed its lawsuit against Coinbase in 2023, accusing the exchange of operating an unregistered securities exchange. The lawsuit also included allegations of offering unregistered securities.

Coinbase contested the charges and sought a dismissal, with industry players criticizing then SEC Chair Gary Gensler of overreach amid regulation by enforcement approach.Notably, the SEC had also sued Binance, the world’s largest crypto exchange by trading volume. Other exchanges to come into the “rogue” agency’s cross-hairs is Kraken.

However, things at the securities watchdog have taken a crypto-friendly turn since Donald Trump’s election and the exit of Gensler and other Commissioners.

Acting chair Mark Uyeda has formed a crypto task force and renamed an enforcement unit amid the quest to balance compliance and the need to protect investors.

Coinbase has revealed that the US SEC has agreed to drop the long-running legal battle against the top crypto exchange. The agreement to drop the Coinbase lawsuit represents a massive development in the Commission’s move to create a regulatory-friendly environment for the crypto industry.

US SEC To Drop Coinbase Lawsuit

In a press release, Coinbase revealed that the US SEC staff has agreed in principle to dismiss its “unlawful enforcement” case against the crypto exchange, subject to Commissioner approval. The top crypto exchange highlighted how this agreement to drop the Coinbase lawsuit rights a “major wrong.”

Coinbase noted that it has always maintained that it was right on the facts and the law and that today’s announcement confirms that the US SEC should have never filed this case in the first place.

Coinbase’s Chief Legal Officer Paul Grewal said this is a victory not just for the exchange but for customers, the United States, and individual freedom. The Commission, under former SEC Chair Gary Gensler, had sued the exchange in 2023, accusing the firm of offering unregistered securities on its trading platform.

Meanwhile, to ensure that “a rogue regulator cannot weaponize the lack of clarity again,” Coinbase stated that the US Congress must pass legislation that provides the long-term certainty needed for the country to lead in the crypto industry. The exchange added that clarity will bring new inflows of capital into the US, update the country’s financial system so consumers can pay lower fees, and help create economic freedom for all.

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Boluwatife Adeyemi

Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across DeFi, NFTs, smart contracts, and blockchain interoperability, among others. Boluwatife has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover and a part-time degen.

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