The US Securities and Exchange Commission (SEC) has decided to dismiss its lawsuit against Coinbase, a leading cryptocurrency exchange. The case, which began in June 2023, accused Coinbase of operating as an unregistered securities broker.
While the dismissal still needs final approval from an SEC commissioner, this move is being seen as a big victory for both Coinbase and the wider crypto industry.
For over a year, Coinbase has been fighting a lawsuit from the SEC, which claimed that the exchange was selling digital assets that should be considered securities.
The regulator argued that Coinbase needed to register its staking services and certain cryptocurrencies under US securities laws. The assets mentioned in the lawsuit included Solana ($SOL), Cardano ($ADA), Polygon ($POL), and Filecoin ($FIL).
Coinbase strongly disagreed with these claims. The company pointed out that it had received approval to be publicly listed on the US stock exchange in 2021. If the SEC truly believed Coinbase was violating securities laws, why did it allow the company to go public? This contradiction was a major part of Coinbase’s defence.
“If this goes through, it’s a really big deal, not just for us, but for the whole crypto industry”, said Coinbase CEO Brian Armstrong. He added that the case represented a larger battle over how cryptocurrencies should be regulated in the US.
The lawsuit created uncertainty for both Coinbase and the wider crypto industry. Many companies worried they could be next in line for legal action. If the SEC’s claims were upheld, it could have forced major changes in how crypto businesses operate in the U.S.
With the SEC now dropping the case, Coinbase will not have to pay any fines or change its business operations. This outcome is rare in legal disputes with regulators and could signal a shift in how authorities approach crypto regulation.
Coinbase’s push for crypto-friendly policies
While fighting the lawsuit in court, Coinbase also worked to influence lawmakers and regulators through political advocacy. The company joined forces with Ripple and other crypto firms to support Fairshake, a political action committee (PAC) that promotes crypto-friendly policies.
Coinbase also launched the Stand With Crypto campaign to educate voters about candidates’ positions on cryptocurrency.
“Crypto voters won’t be taken seriously until we send a clear message to political candidates that it is bad politics to be anti-crypto”, Armstrong said in June 2024.
Some experts believe these efforts may have played a role in the outcome of the 2024 US elections. According to Tonya M. Evans, a professor at Pennsylvania State University, the election results were extremely close, and pro-crypto voters could have made a difference.
The regulatory environment has also shifted since the lawsuit began. Gary Gensler, who led the SEC’s crackdown on crypto, stepped down in early 2025. His departure and the appointment of interim leadership, including Commissioner Mark Uyeda, who is seen as more crypto-friendly, may have influenced the decision to dismiss the case.
The Trump administration, now back in power, has also signalled support for the crypto industry. After the SEC’s decision was announced, Armstrong thanked other crypto firms that had fought similar legal battles. He also emphasised the need for clear regulations that allow crypto businesses to operate without fear of sudden lawsuits.
Impact on the crypto industry
The SEC’s decision to drop the case could have a big impact on the crypto industry. Many companies have been hesitant to expand their services in the US due to the regulatory uncertainty.
With this lawsuit ending in Coinbase’s favour, other firms may feel more confident about adding new tokens or even going public.
For example, trading platform Robinhood recently reported a 115% increase in crypto trading revenue in the fourth quarter of 2024. If regulatory pressure eases, Robinhood and other platforms may decide to offer more crypto-related services, boosting their earnings further.
There is also speculation that several crypto firms are considering initial public offerings (IPOs) in the US Companies like Blockchain.com, BitGo, Gemini, eToro, Bullish Global, Ripple, and Circle have all been rumoured to be exploring the possibility of going public.
If the regulatory climate becomes more favourable, more crypto businesses might choose to list on US stock exchanges.
Coinbase has also continued to build trust in its services despite the legal battle. The company recently launched Proof of Reserves for its wrapped Bitcoin product, cbBTC. This feature allows users to verify that cbBTC is fully backed, increasing transparency in the crypto space.
Last year, Coinbase expanded its partnership with Visa to enable faster deposits and withdrawals. The new integration, which uses Visa Direct, allows eligible users in the US and Europe to move funds instantly between their Visa debit cards and Coinbase accounts. This move aims to make crypto transactions easier and more accessible for everyday users.
Following the news of the lawsuit’s dismissal, Coinbase’s stock (COIN) jumped 5% before the market opened. The broader crypto market also responded positively, with Bitcoin ($BTC) climbing towards $100,000—a level not seen since early February 2025. Other tokens that were previously labelled as securities under Gensler’s SEC also saw price gains, reflecting improved market sentiment.
The SEC’s decision to drop the case follows a broader trend of regulatory changes. Earlier this month, the SEC paused its lawsuit against Binance and abandoned an appeal related to crypto broker-dealer rules. These moves suggest a shift in how the US government is approaching cryptocurrency regulation.
Recent data also highlights the growing adoption of crypto. According to Statista, crypto ownership in the US reached 50 million people in 2024, up from 40 million in 2022. With more people using digital assets, the demand for clear and supportive regulations is higher than ever.
Armstrong has warned that years of aggressive regulation nearly crippled the crypto industry. He repeated this concern in a social media post on 21 February 2025, calling for the US to establish fair and predictable rules for crypto businesses.
As the legal battle ends, Coinbase and other crypto firms will be watching closely to see what comes next for regulation in the US.
While this decision is a major win, the industry is still pushing for clear guidelines that will allow it to grow without the constant threat of lawsuits.
