Crypto Exchange Coinbase Sees Major Win as SEC Ends Enforcement Case

According to Coinbase, the Securities and Exchange Commission (SEC) has agreed to end an enforcement case that accused the company of operating an unregistered securities exchange. This development could signal a significant shift in how the US government regulates the crypto market under the Trump administration. The lawsuit, which was filed during the Biden administration, has long been seen as an attempt to bring the crypto industry under the same investor-protection rules that govern traditional securities.

Coinbase’s Victory

Coinbase had been fighting the lawsuit, arguing that it does not deal in securities and likening the commodities it sells to baseball cards. The company’s appeal will soon become moot, assuming the SEC officially votes to dismiss the suit, which is expected to happen next week. "It’s a great day for Coinbase and for crypto," said Paul Grewal, Coinbase’s chief legal officer, in a statement to The Wall Street Journal. "We were committed to defending it to the gates of hell, for as long as it took and for as much money as it took."

No Fine for Coinbase

Coinbase co-founder and CEO Brian Armstrong appeared on CNBC’s Squawk Box and stated that the company will not be paying a fine of any kind. He also described the agreement to end the case as a "huge day" for Coinbase, predicting it will have a "domino effect for the rest of the industry." Armstrong blamed the original suit on a "small group of activists in this prior administration."

Trump Administration’s Crypto Stance

The move does not come as a surprise, given President Trump’s recent embrace of crypto, including the launch of his own digital coin. The SEC has already begun to break up its special enforcement unit dedicated to investigating crypto organizations. Coinbase and its rivals spent millions of dollars during the last election cycle to help elect crypto-friendly lawmakers, and it seems that investment is paying off.

Shift in Regulatory Approach

Acting SEC Chairman Mark Uyeda recently announced that the organization will now "deploy enforcement resources judiciously" when investigating crypto companies. A new task force will move away from the commission’s previous approach toward the crypto market. Republican House and Senate lawmakers are working on legislation to reclassify cryptocurrencies as commodities, which would likely hand oversight of crypto assets to the Commodity Futures Trading Commission (CFTC).

Impact on Crypto Market

The crypto market is responding positively to the news, with Coinbase’s stock price rising, along with that of Robinhood. Rival market Binance even restored fiat deposits and withdrawals this week, which were suspended in 2023 after the SEC sued the company for securities law violations. The CFTC, which would potentially oversee crypto assets, is currently smaller than ever, having been affected by the Trump administration’s recent layoffs.

Market Reaction

The crypto market’s favorable response to the news is evident in the increased stock prices of Coinbase and Robinhood. The restoration of fiat deposits and withdrawals by Binance also indicates a positive trend. As the regulatory landscape continues to evolve, it will be interesting to see how the crypto market adapts and responds to these changes.