- Enforcement action against Coinbase to be dismissed by SEC
- Originally, the SEC filed a lawsuit against Coinbase in June 2023
- The agency has also voluntarily dismissed its appeal concerning the application of broker-dealer regulations to DeFi platforms
As of today, the SEC has agreed in principle to dismiss its enforcement case against Coinbase exchange. The decision is pending approval from the SEC’s commissioners, expected to take place next week.
Initially, in June 2023, under the leadership of then-Chair Gary Gensler, the SEC filed a lawsuit against Coinbase, accusing it of operating as an unregistered securities exchange, broker, and clearing agency.
The SEC claimed Coinbase facilitated trading in at least 13 crypto tokens considered securities without proper registration.
Coinbase consistently refuted the SEC’s allegations, asserting that its business model had been transparent and previously reviewed by the SEC during its public listing process in April 2021. The company noted that no major changes have occurred in its operations to justify the legal action.
SEC’s Expanded Enforcement & Industry Impact
Just recently, the SEC had also withdrawn its appeal concerning the application of broker-dealer regulations to decentralized finance (DeFi) platforms, effectively ending that legal dispute.
Earlier in 2024, the SEC proposed expanding the definition of “dealer” to cover crypto liquidity providers and automated market makers with over $50 million in capital, which would have required them to register as dealers.
Both of these decisions align with a broader shift in the US government’s approach to cryptocurrency regulation.
Related: SEC’s Dealer Rule Struck Down: DeFi Exchanges Safe from Overreach
Following the election of US President Donald Trump, there has been a noticeable move toward a more lenient and industry-friendly regulatory environment for digital assets. This change is exemplified by the establishment of a Crypto Task Force within the SEC, intending to provide clearer guidelines and reduce enforcement actions against crypto firms.
Related: SEC Withdraws DeFi Appeal Under New Crypto-Friendly Leadership
If the SEC commissioners officially approve the dismissal, it will mark a major win for Coinbase and could set a precedent for other crypto firms facing similar regulatory challenges.
Following the announcement, Coinbase’s shares climbed over 4% in premarket trading, reflecting investor optimism about its regulatory outlook and future prospects.
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