SEC Drops Lawsuit Against Coinbase

Landmark Decision for U.S. Crypto Regulation

The U.S. Securities and Exchange Commission (SEC) has agreed to drop its lawsuit against Coinbase, marking a significant legal victory for the exchange and a potential turning point for crypto regulation in the United States.

Coinbase CEO Brian Armstrong called the decision “a really big deal”, not just for Coinbase but for the entire crypto industry and the 50 million Americans who hold crypto. However, the dismissal is still pending final approval by an SEC commissioner.

Background: SEC vs. Coinbase

The SEC originally sued Coinbase in June 2023, alleging that the company was operating as an unregistered securities broker. The lawsuit was part of a broader regulatory crackdown under former SEC Chair Gary Gensler, which aimed to classify many cryptocurrencies and staking services as unregistered securities.

The SEC’s case targeted several crypto assets, including:

Solana (SOL)
Cardano (ADA)
Filecoin (FIL)
Polygon (MATIC)

Coinbase pushed back, criticizing the SEC’s overreach and pointing out that the agency approved its public listing in 2021, only to later claim the company was operating illegally.

Coinbase’s Political and Legal Counterattack

Coinbase didn’t just fight in court—it ramped up political advocacy efforts, joining forces with Ripple and other crypto firms to push for pro-crypto regulation. The company:

Donated millions to Fairshake, a crypto-focused political action committee (PAC).
Backed Stand With Crypto, an advocacy group educating voters about pro-crypto lawmakers.

Armstrong emphasized the need for political influence, stating in 2024:

“Crypto voters won’t be taken seriously until we send a clear message that it is bad politics to be anti-crypto.”

According to experts, these efforts played a role in shaping the outcome of the 2024 U.S. elections, which were decided by razor-thin margins.

What This Means for the Crypto Industry

The SEC’s decision to withdraw the lawsuit could indicate a loosening of regulatory pressure on crypto firms in the U.S. If finalized, it might set a precedent for future legal battles between regulators and crypto companies, paving the way for clearer regulations rather than enforcement-driven crackdowns.

As the industry waits for final confirmation, this development signals a major step forward for crypto adoption and regulatory clarity in the U.S.