SEC Commissioners to Vote on Dismissing Case Against Coinbase

Staff at the SEC have agreed to drop the lawsuit against Coinbase, pending approval from the agency’s commissioners. This was announced by the co-founder and CEO of the exchange, Brian Armstrong.

SEC staff have agreed to dismiss their case against us (pending Commission approval).
But this isn’t the end.
It’s the beginning.
And if there were ever a time to build—that time is now.

Thank you to everyone who stood with us, and stood with crypto. pic.twitter.com/gjokUZPotz

— Coinbase ?️ (@coinbase) February 21, 2025

The Commission’s leadership is expected to vote next week, the entrepreneur clarified.

The SEC filed a lawsuit against the platform in June 2023, accusing it of violating securities laws and operating without registration. The regulator also targeted Coinbase Earn’s staking program.

In response to the lawsuit, the exchange accused the agency of overstepping its authority. The company noted that it had complied with all supervisory requirements for many years and had repeatedly sought direct guidance on the application of securities regulations.

Meanwhile, SEC lawyers questioned the accuracy of Coinbase’s claims of unintentional legal violations.

Representatives of the exchange filed a motion demanding the agency and its then-head Gary Gensler provide emails and internal documents underlying its lawsuit. Lawyers also mentioned files related to Coinbase’s application for listing on Nasdaq in April 2021. The SEC had approved the company’s transformation into a public entity at that time.

In a video address, Armstrong noted that he decided to stand up to the Commission despite numerous advisories against it. Arguments included:

• multimillion-dollar litigation costs;
• downward pressure on stock prices from negative news;
• potential investor withdrawal. 

The entrepreneur admitted that legal battles with the SEC cost Coinbase approximately $50 million.

“I think ultimately the courage to fight came from a sense of being right on the facts and the law. Secondly, if we didn’t stand up to this bullying, it could have been the end of the crypto industry in the U.S.—not many other companies have such deep pockets,” Armstrong added.

He believes that halting the exchange’s prosecution will be a positive signal for the direction of cryptocurrency regulation in the U.S. and create a domino effect regarding other Commission cases against crypto companies.

“Now, ultimately, we still need to pass cryptocurrency legislation to codify some of these rules and ensure a solid foundation is built for the industry,” Armstrong stated.

Following the departure of Jaime Lizárraga and former chairman Gary Gensler from the SEC in January, only three commissioners remain: Mark Uyeda (acting head), Hester Peirce (known as “crypto mom”), and Caroline Crenshaw. The first two are well-known supporters of digital assets. 

The interim chairman of the Commission has taken several measures to reduce pressure on the industry and created a task force led by Peirce.

Uyeda also replaced the division responsible for enforcement actions against crypto companies with a new department. This structure will focus on combating fraud in emerging technologies such as blockchain and AI.