Resolution of the Protracted Coinbase SEC Lawsuit
In a significant development for the cryptocurrency sector, Coinbase, one of the industry’s most prominent players, declared last Friday that the long-standing lawsuit against it by the Securities and Exchange Commission (SEC) is set to be abandoned. This unexpected move is reflective of earlier commitments by the Trump administration to soften rigorous oversight, thereby symbolising a fulfilment of campaign pledges.
This contentious lawsuit, brought to light by the SEC in 2023, placed Coinbase under the hard-hitting charge of vending unregistered securities through its cryptocurrency trading platform. The ensuing legal war ended up burning quite a hole in taxpayer’s pockets.
Confirming the Termination of the Coinbase SEC Lawsuit
Brian Armstrong, the CEO at the helm of Coinbase, has declared that fruitful negotiations with the SEC have led to an agreement proposing the discontinuation of the drawn-out litigation. Ascertaining the realization of this resolution still hinges upon approval from the Commission. Once received, the termination will come without any financial penalties for Coinbase or any mandated modification of its business practices.
The SEC and its Outlook on Cryptocurrencies
The SEC has continually posited that select digital currencies bear resemblance to financial securities. As a result, the agency argues, these currencies should submit to similar regulatory scrutiny as traditional financial instruments such as stocks and bonds. The SEC’s overarching thesis found representation in the words of former chairman Gary Gensler, who has termed the cryptocurrency market as being akin to the wild west.
Despite this consistent position from the SEC, those within the cryptocurrency sector have displayed staunch resistance to such classification. This objection to SEC’s arguments has been voiced by numerous industry incumbents, including Armstrong, Coinbase’s CEO. The industry’s collective support veered towards President Donald Trump, given his vocal endorsement of policies advocating for a less straitlaced business environment.
Discover the impact of Trump policy and it’s impact here
Post-Lawsuit: The Aftermath for Coinbase and the SEC
The Trump administration also showed its alignment with the sector by selecting Paul Atkins, a seasoned Washington attorney with cryptocurrency links, to steer the SEC as its chair, replacing Gensler. In light of cancelation announcements of the Coinbase SEC lawsuit, the company’s shares experienced a modest spike of 2%, while there has been no public statement on the matter from the SEC.
