Key Points:

• The SEC has agreed in principle to dismiss Coinbase lawsuit without penalties or operational changes.
• The decision reflects a broader shift in crypto regulation, with the Trump administration promoting digital asset adoption and easing restrictions.

The U.S. Securities and Exchange Commission (SEC) has agreed in principle to drop the Coinbase lawsuit, marking a significant development in the regulatory landscape for digital assets.

The move, which still requires approval from the SEC’s commissioners, follows nearly two years of legal battles between the agency and the crypto giant. This could set a precedent for future enforcement actions, influencing other ongoing lawsuits, including those against Binance and Ripple.

SEC Moves to Dismiss Coinbase Lawsuit After Two Years

Coinbase announced the agreement on Friday through a blog post and regulatory filing, stating that the case would be dismissed without financial penalties or operational changes.

CEO Brian Armstrong called the decision “great news” on social media. While chief legal officer for the company, Paul Grewal asserted that "a wrong will simply be made right."

The Coinbase lawsuit, originally filed in 2023, accused the exchange of selling unregistered securities and argued that digital assets should be regulated under existing securities laws to protect investors. The case was among the most high-profile actions taken by the SEC under former Chair Gary Gensler, who led an aggressive push for stricter oversight of the $3 trillion cryptocurrency market.

Coinbase Faces Ongoing Legal Challenges

The potential dismissal suggests a broader shift in regulatory priorities under the Trump administration. In January, President Donald Trump signed an executive order aimed at promoting cryptocurrency adoption and exploring the creation of a national digital reserve.

Coinbase had previously purported that regulatory actions against it were politically motivated, accusing the Biden administration of targeting the crypto industry.

Despite this legal victory, Coinbase continues to face legal challenges. A separate class-action lawsuit, originally filed in 2021, accuses the company of operating as an unregistered broker and failing to disclose investment risks. A federal judge recently rejected Coinbase’s attempt to dismiss this case, meaning further legal battles remain on the horizon.