The US Securities and Stock Exchange Committee (SEC) plans to withdraw the lawsuit against Coinbase, a major platform for the exchange of cryptocurrencies, which represents a major shift in the agency’s organizational approach.
The decision, confirmed by Coinbase on Friday, follows the broader SEC efforts to review its position on digital assets under the Republican leadership.
The lawsuit, which was filed in 2023, accused the Coinbase group of facilitating trading in at least 13 code codes that SEC considers unregistered securities. It also challenged the restricted Coinbase, which allows users to collect assets to verify Blockchain transactions in exchange for rewards, arguing that it should have been registered with the agency.
SEC has taken enforcement measures against multiple cryptocurrencies in recent years, including Binance and Kraken. These lawsuits started under former SEC president Gary Ginsler, who gave priority to aggressive supervision of the digital assets sector.
According to the current administration, SEC has expanded its enforcement efforts, as it renamed its specialized unit to focus on the broader electronic and emerging technologies.
Coinbase stated in a blog post that SEC staff “agreed in principle” to reject the case, although the final decision requires commission vote. The regulator’s new leadership has indicated a shift towards the formulation of cryptocurrencies instead of continuing litigation.
This shift in politics comes as President Donald Trump’s administration moves quickly to review the encryption regulations.
In his first week in office, Trump ordered the formation of a working group for the encrypted currency to propose new rules and explore the construction of stock of national cryptocurrency. He also issued an executive order that ensures that banking services remain within the reach of encryption companies, to address industry concerns about financial access.
The SEC’s withdrawal of the case against Coinbase is a major organizational change in the encryption industry. There are still other enforcement cases under review, with more decisions expecting in the coming months.
