SEC to Dismiss Coinbase Case, Pending Commissioners’ Approval

The U.S. Securities and Exchange Commission (SEC) has agreed in principle to dismiss its high-profile enforcement case against Coinbase, pending approval from the agency’s commissioners, marking a pivotal moment in the regulator’s contentious oversight of the cryptocurrency sector.

SEC Staff Recommends Dismissal of Coinbase Enforcement Case, Pending Final Approval

The SEC’s enforcement division reportedly reached the decision after months of litigation, according to a Friday statement by Coinbase Chief Legal Officer Paul Grewal. If finalized, the dismissal would resolve allegations that the exchange operated as an unregistered securities platform and listed unregistered assets—claims Coinbase repeatedly contested as legally unfounded.

Coinbase, which went public in 2021 after SEC staff reviewed its business model and registration disclosures, was sued by the agency in 2023. Grewal argued the lawsuit contradicted the SEC’s prior stance, noting the company’s operations did not change during the intervening two years. He attributed the case to shifting political priorities under new SEC leadership, accusing the agency of overstepping congressional authority in its approach to crypto regulation.

The dismissal, though not yet finalized, could weaken the SEC’s broader enforcement strategy in crypto. Legal experts believe it may embolden other firms facing similar allegations, including Binance and Kraken, which are embroiled in parallel lawsuits. Grewal called the outcome a “win for the entire industry” and the 52 million Americans holding digital assets.

Coinbase and industry advocates have long criticized the SEC for relying on enforcement actions instead of creating clear regulatory frameworks. Grewal emphasized the need for Congress to pass legislation establishing rules for crypto markets, arguing clarity would spur U.S. innovation, reduce consumer costs, and attract capital.

The case’s proposed resolution comes as lawmakers debate bills to define oversight of digital assets. Meanwhile, Coinbase reiterated its commitment to “building” within the U.S. financial system. “We must enable entrepreneurs, builders, and innovators to update our financial system and bring the world onchain,” Grewal said.

SEC commissioners are expected to review the staff recommendation in the coming weeks. A final dismissal would represent one of the crypto sector’s most significant legal victories against federal regulators.