(Bloomberg) — Coinbase Global Inc. said the Securities and Exchange Commission has agreed to drop its lawsuit that accused the largest US cryptocurrency trading platform of running an illegal exchange. The agreement is pending commissioner approval.
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Coinbase shares jumped in premarket trading on Friday, only to reverse course and decline 4% to $246.30 as of 12:45 p.m. in New York. Bitcoin was down about 1% on the day at around $97,000.
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.
