Coinbase CEO Brian Armstrong claims that the US Securities and Exchange Commission (SEC) has agreed to dismiss a lawsuit against the cryptocurrency exchange, citing it as a ‘hugely vindicating’ resolution.
The US Securities and Exchange Commission (SEC) has allegedly reached an agreement with cryptocurrency exchange Coinbase to dismiss a lawsuit against the firm. According to Coinbase’s chief executive Brian Armstrong, this potential dismissal would be ‘hugely vindicating‘.
The Coinbase-SEC dispute revolves around the classification of cryptocurrencies as securities.
In July 2020, the US Securities and Exchange Commission (SEC) sent a Wells Notice to Coinbase, indicating potential enforcement action for listing unregistered securities on its platform.
The SEC alleged that certain digital assets, such as staking rewards and lending products, constitute investment contracts and are therefore subject to federal securities laws.
Coinbase has argued that these assets are commodities or utility tokens, not securities.
Background on the Lawsuit
In 2023, the SEC alleged that Coinbase had violated laws by offering investments subject to its rules without proper registration. The regulator claimed that Coinbase was operating illegally in the US by taking on multiple roles as an exchange, broker, and clearing agency without registering for these functions.
The lawsuit accused Coinbase of offering ‘unregistered securities‘ and facilitating billions of dollars’ worth of unlawful transactions since at least 2019. This, the SEC argued, deprived people buying or selling those financial products of significant protections.
Coinbase’s Response
In a post on X, Brian Armstrong stated that an agreement had been reached with the regulator’s staff to dismiss the lawsuit without fines or changes to Coinbase’s operations. A spokesperson for the SEC declined to comment on this claim.
In July 2022, Coinbase agreed to a $50 million settlement with the US Securities and Exchange Commission (SEC) over charges of listing unregistered securities.
The settlement resolved four investigations into Coinbase's activities.
The SEC had accused Coinbase of failing to register its trading platform for certain digital assets, which are considered securities under federal law.
Coinbase cooperated fully with the SEC investigation and has since taken steps to ensure compliance with relevant regulations.
Armstrong also praised ‘President Trump’ and the ‘crypto voter‘ for helping secure his victory in 2024. He thanked crypto holders who elected pro-crypto candidates, saying that their efforts had preserved their rights.
Tensions with Former SEC Chair
Armstrong’s post also criticized former SEC chair Gary Gensler, who led tougher enforcement actions against crypto exchanges until he stepped down in January. Gensler had filed a similar case against Binance, which was recently granted a 60-day pause by the SEC amid shifting US regulations.
Gary Gensler is an American economist and regulatory expert.
He served as the Chairman of the Commodity Futures Trading Commission (CFTC) from 2009 to 2014.
Prior to his appointment, he was a professor at the University of Pennsylvania's Wharton School.
Gensler has also worked in the private sector, including serving as the Under Secretary for Domestic Finance at the US Department of the Treasury during the Clinton administration.
Call for Clear Rules
Coinbase’s chief legal officer Paul Grewal echoed Armstrong’s call for legislation to help boost the cryptocurrency sector. He stated that ‘there will be no settlement or compromise— a wrong will simply be made right‘ and emphasized the need for clear rules to enable the industry to thrive in the US.
Grewal also expressed Coinbase’s commitment to working with Congress and SEC staff on this next phase of progress, saying ‘we won’t stop fighting until we have the clear rules needed’
- bbc.com | Coinbase boss claims SEC will drop crypto lawsuit
- sg.news.yahoo.com | Coinbase boss claims SEC will drop crypto lawsuit
