The US Securities and Exchange Commission has agreed to dismiss its lawsuit against centralized exchange firm Coinbase, which had accused the company of operating as an unregistered securities broker.
According to an announcement from Coinbase, the dismissal is still subject to approval by an SEC commissioner before the suit is officially withdrawn. Coinbase CEO Brian Armstrong said:
“If this goes through, it’s a really big deal, not just for us, but for the whole crypto industry, the 50 million Americans who hold crypto, and I think for the rest of the world because this is an important signal about where things are going.”
The SEC sued Coinbase in June 2023 amid a torrent of litigation attempting to frame many crypto firms and projects as either unregistered securities brokers or securities in and of themselves, placing heavy regulatory and financial pressure on the industry.
SEC lawsuit against Coinbase filed in 2023. Source: SEC
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Coinbase fights back against the SEC
The SEC, under the leadership of former Chair Gary Gensler, claimed that Coinbase failed to register its staking services with the financial regulator.
Several cryptocurrencies were named as “unregistered securities” in the SEC’s 2023 lawsuit against Coinbase, including Solana (SOL), Cardano’s ADA (ADA), Filecoin (FIL), Polygon (POL) and others.
Coinbase characterized the lawsuit as regulatory overreach and slammed the SEC for filing a suit after approving the company’s public listing on US stock exchanges in 2021.
The company also responded to the lawsuit by mobilizing a political pressure campaign alongside Ripple and other industry firms — donating tens of millions to Fairshake, a political action committee (PAC) that spreads public awareness about crypto regulations and lobbies the US government for industry-friendly regulation.
Coinbase also backed the Stand With Crypto advocacy group to promote voter education about pro-crypto lawmakers and important regulatory policies.
“Crypto voters won’t be taken seriously until we send a clear message to political candidates that it is bad politics to be anti-crypto,” Coinbase CEO Armstrong said in June 2024.
These advocacy efforts seemed to have helped influence the outcome of the 2024 elections in the United States, which Tonya M. Evans — a tenured professor at Pennsylvania State University — told Cointelegraph was determined by razor-thin margins.
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