Coinbase CEO Predicts SEC Will Withdraw Cryptocurrency Lawsuit

Coinbase CEO Brian Armstrong expressed significant satisfaction over what appears to be an impending resolution in a long-standing legal dispute involving the US Securities and Exchange Commission (SEC). According to reports, Coinbase has claimed that the SEC is considering dropping its lawsuit against the company. The SEC had previously alleged in 2023 that Coinbase violated securities laws by offering investments subject to federal regulations without proper registration.

In a post on X earlier this week, Armstrong announced what he referred to as an “agreement” with SEC staff to dismiss the legal action. Crucially, if confirmed, this resolution would mean Coinbase paying no fines and making no operational changes. However, the SEC declined to comment on these reports.

The lawsuit filed by the SEC accused Coinbase of operating unlawfully in the US for over five years (since at least 2019). The main allegations were that Coinbase had failed to register as an exchange, broker, and clearing agency when required by law. It was also charged with offering unregistered securities. As a result, the SEC claimed people engaging in these transactions lacked significant legal protections.

The SEC’s action against Coinbase is part of its broader efforts to regulate cryptocurrency firms. During his 2024 campaign, President Donald Trump had promised to reverse such aggressive regulatory approaches towards cryptocurrencies.

In his X post, Armstrong expressed relief at the potential resolution of the lawsuit, referring to it as “hugely vindicating.” He also took this opportunity to thank crypto holders in the US for voting for pro-crypto candidates during recent elections. “I want to give a shout out to all the crypto holders in the US who elected pro-crypto candidates,” Armstrong wrote, emphasizing that these voters had indeed made their voices heard.

Armstrong’s post also included criticism of former SEC Chair Gary Gensler, who led stricter enforcement actions against cryptocurrency exchanges until stepping down in January. He was one of several regulators responsible for the aggressive stance towards crypto firms during this period. Gensler had previously filed a lawsuit against Binance, which has since received temporary relief from further action.

Coinbase’s chief legal officer, Paul Grewal, also addressed the situation on X, maintaining that Coinbase would not settle or compromise under any circumstances. “There will be no settlement or compromiseonly righting what is wrong,” he declared. He echoed Armstrongs calls for legislative reforms to enable the cryptocurrency industry to flourish in the US.

Both executives emphasized their commitment to working with Congress and SEC staff on future regulatory developments, aiming to create clear guidelines that would support a thriving crypto market within the country.

Cryptocurrency enthusiasts have watched this case closely, as it could set significant precedents for how financial regulations will impact digital assets in the near future. The resolution of Coinbase’s legal battle with the SEC is therefore seen as a critical moment for both the cryptocurrency industry and broader regulatory landscapes governing digital finance.