Coinbase boss claims SEC will drop crypto lawsuit

Cryptocurrency exchange Coinbase claims that the U.S. Securities and Exchange Commission (SEC) plans to drop its lawsuit against the company. The lawsuit was initially filed by the SEC in 2023, alleging that Coinbase offered investment products subject to its rules without proper registration, violating relevant laws.

Coinbase CEO Brian Armstrong stated on social platform X on Friday that an "agreement" has been reached with SEC staff, and once confirmed, the lawsuit will be dropped, with Coinbase not required to pay fines or make any changes to its operating methods. However, an SEC spokesperson declined to comment on the matter.

The SEC's lawsuit accuses Coinbase of illegally operating in the United States, engaging in the services of an exchange, broker, and clearing agency without registration. The lawsuit also claims that the crypto assets offered by Coinbase are considered "unregistered securities" by the SEC. The SEC stated in June 2023: "Since 2019, Coinbase has illegally facilitated the buying and selling of crypto asset securities, profiting billions of dollars." The regulator believes this deprives those buying and selling these financial products of "critical protections."

The lawsuit is part of a broader crackdown by the U.S. government on cryptocurrency companies. In this context, Armstrong stated on X that the SEC's potential withdrawal of the lawsuit (which has not been confirmed by the regulator) is "a huge vindication." In a lengthy post, he thanked President Trump for winning the election and praised the role of "crypto voters" in helping to secure his victory. He wrote: "I want to salute all the crypto holders across America who voted for pro-crypto candidates in this election, ensuring your rights are protected."

Armstrong's post also slammed former SEC Chairman Gary Gensler, who led the tougher enforcement actions against cryptocurrency exchanges before leaving office in January. Gensler had previously filed a similar lawsuit against Binance, the world's largest digital asset trading platform, which the SEC recently suspended for 60 days due to changes in U.S. regulations. Coinbase Chief Legal Officer Paul Grewal also wrote on X: "There will be no settlement or compromise – the wrong will be righted." He added: "We won't stop fighting until we get clear rules to allow this industry to truly thrive in the U.S."

Grewal echoed Armstrong's call for legislation to help promote the cryptocurrency industry. He stated: "We look forward to working with Congress and SEC staff to advance this process together." Trump also sought to appeal to cryptocurrency companies and investors during his campaign, claiming he would fire Gensler on "day one" of his presidency.