On Friday, Coinbase announced that the Securities and Exchange Commission (SEC) has agreed to dismiss the lawsuit against the company with prejudice. This decision implies that the lawsuit cannot be refiled.
The decision awaits approval from the SEC’s Commissioners. It is viewed as an indication that the current administration may be adopting a more crypto-friendly stance compared to the previous leadership under Gary Gensler.
The SEC’s lawsuit, initiated in 2023, claimed that crypto assets were securities. It stated that Coinbase was functioning as an unregistered national securities exchange, broker, and clearing agency. In response, Coinbase argued that the SEC had not provided sufficiently clear regulations regarding cryptocurrency to warrant such a lawsuit.
Coinbase CEO Brian Armstrong, in a video posted on X, reflected on the costly advice they received in 2023 about avoiding litigation with the SEC, warning of expenses in the tens of millions. In the video, Armstrong also accused the SEC of various tactics and motivations.
Armstrong asserted that his efforts were aimed at safeguarding the crypto industry in the United States. He noted that not many companies had the financial resources that Coinbase had, highlighting that they eventually spent $50 million defending the case, aligning with the early warnings about the potential costs.
A Coinbase spokesperson specified that this $50 million expenditure was solely for external legal fees rather than employee time.
Despite the apparent legal success, Armstrong emphasized the necessity for the U.S. to pass legislation that supports the crypto industry to remain competitive globally.
