Coinbase Drops Lawsuit as SEC Retreats Under Trump
Coinbase, the United States’ leading cryptocurrency exchange, has emerged victorious from a legal battle with the Securities and Exchange Commission (SEC), which has reportedly agreed to drop its charges. This development comes amid a shift in the regulatory landscape under President Donald Trump, who has expressed support for the cryptocurrency industry.
SEC’s Previous Crackdown
In June 2023, the SEC filed a civil lawsuit against Coinbase, alleging that the exchange had failed to register as a broker and exchange for cryptocurrencies. The SEC has also pursued legal action against Binance and Kraken, two other major exchanges, as well as several smaller startups.
Gary Gensler, the SEC’s chairman, has been a vocal critic of cryptocurrencies, but he unexpectedly resigned on the day of Trump’s inauguration, who had promised to terminate his tenure.
Coinbase’s Victory
Coinbase announced in a statement that the SEC had "agreed in principle to dismiss" the lawsuit, subject to a final order. Brian Armstrong, Coinbase’s CEO, expressed hope that the dismissal would become definitive the following week.
The SEC declined to comment on the matter when contacted by the AFP. Coinbase hailed the development as a "major victory for the rule of law and a clear affirmation of our position, but most importantly, it’s a huge win for the entire crypto industry and the 52 million Americans who own digital assets."
Trump’s Cryptocurrency Shift
Trump, who once dismissed cryptocurrencies as "a scam," has since changed his stance during his second election campaign, which was partly funded by the industry. He has pledged favorable policies for cryptocurrencies and even launched his own digital currency, the Trump Coin, shortly before his inauguration.
The price of Bitcoin, the leading cryptocurrency, has surged significantly since the Republican billionaire took office. Armstrong had hailed the president’s arrival as "a new dawn" for the industry in January.
Regulatory Shift
The SEC’s retreat from pursuing Coinbase is seen as a reflection of the shifting regulatory environment for cryptocurrencies under the Trump administration. The previous administration had taken a proactive approach to enforcement, but Gensler’s departure and Trump’s support for the industry suggest a more conciliatory stance.
The crypto industry has welcomed the change, viewing it as a sign of increased legitimacy and acceptance. However, it remains to be seen how the regulatory landscape will evolve in the future and whether the SEC will continue to pursue enforcement actions against other players in the market.
Conclusion
The SEC’s decision to drop its lawsuit against Coinbase marks a significant victory for the cryptocurrency exchange and the industry as a whole. It reflects a shift in the regulatory landscape under President Trump, who has expressed support for cryptocurrencies and promised favorable policies. The future of cryptocurrency regulation remains uncertain, but the industry is cautiously optimistic about the direction it is heading.
