The largest U.S.-based cryptocurrency exchange said Friday the Securities and Exchange Commission would drop its lawsuit against them, a signal to the broader crypto industry that the Trump administration plans to take a friendlier approach to it.
In a release it titled “Righting a major wrong,” the exchange, Coinbase, said SEC staff had agreed in principle to dismiss a suit filed during the Biden administration. The suit accused Coinbase of acting as an unregistered securities broker.
The agency must still vote to formally drop the suit.
A representative for the SEC declined to comment on Coinbase’s announcement.
“I think it is a really important signal that a small group of activists in the prior administration who tried to unlawfully attack this industry — we are able to turn page on that and finally get regulatory clarity in America,” Coinbase CEO Brian Armstrong said in an interview on CNBC Friday morning.
Coinbase shares were up 5% in pre-market trading. Bitcoin prices were up 1%.
The move to drop the suit would serve to make good on President Donald Trump’s campaign commitment to roll back the strict enforcement of the crypto industry that occurred under Biden. Trump has promised to make the U.S. the “crypto capital of the world,” and has himself launched his own meme coin.
In its original suit, the SEC said Coinbase’s alleged actions were depriving investors of “critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC.”
“You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great,” Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said at the time.
To date, the SEC still has not categorized bitcoin as a security. The crypto industry has long complained that, under the former chair Gary Gensler, the agency took an overly critical posture toward the industry even as it failed to provide clear “rules of the road” and work with it to develop a means for them to operate legally.
Lawsuits against two other exchanges, Binance and Kraken, are still pending.
“We tried to ‘come in and register’ but it turned out it was a fake offer, as every crypto company discovered,” Armstrong wrote in a separate post on X Friday, referring to the Biden administration’s previous actions concerning the crypto industry.
“Regulators are supposed to enforce the law, but they can’t make up new laws on the spot if they don’t like the current ones, or weaponize a lack of clarity in the law.”
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