U.S. securities regulators plan to withdraw lawsuits against cryptocurrency exchanges, ending a controversial years of legal battle that was once considered an existence of trading platforms and a broader sector, Coinbase said Friday.
Since President Donald Trump took office, the SEC has quickly adopted a major overhaul to regulate Republican leaders. The agency has established a dedicated working group and has eliminated accounting guidance related to keys and encryption.
Reuters previously reported that the SEC, which declined to comment, has been expected to review pending court cases and withdraw its lawsuits before overhauling the regulations. Nevertheless, the decision to dismiss the lawsuit against Coinbase, one of many lawsuits by the previous SEC chairman, would be the most dramatic move to represent the Republican leader.
“The war that applies to Coinbase at least has ended,” said Paul Grewal, chief legal officer of Coinbase in an interview.
In a blog post, the exchange said SEC staff “in principle, agree” to dismiss the case, although the committee has not voted on the final decision.
Republican officials at the SEC also immediately began overhauling the agency’s crypto policy, even before the arrival of Paul Atkins, a Trump-friendly choice for the SEC president.
Revisiting cases against cryptocurrency companies – especially those that violate SEC rules but are not suspected of cheating investors – although many legal experts told Reuters they hope the SEC seeks settlement and dismiss all pending matters will be Considered unprecedented.
The SEC sued Coinbase, the largest crypto exchange in the United States and a rival trading platform in 2023. Following the SEC and Binance’s request, the court suspended the agency’s lawsuit against another company, respectively, in the meaning of the new working group.
The agency also sued crypto exchange Kraken in 2023.
The SEC accused Coinbase of violating its rules and facilitated transactions in at least 13 crypto tokens that should be registered as securities.
The lawsuit also targets Coinbase’s “Sticking” program, where it aggregates assets to validate activity on the blockchain network and takes commissions in exchange for “rewards” to customers. The SEC said the program should be registered with the agency.
Coinbase believes that unlike stocks and bonds, crypto assets do not meet the definition of investment contracts, which is the vast majority of positions in the cryptocurrency industry. As outlined in the U.S. Supreme Court case, a key test of whether investment products are safe is whether people are investing in common businesses with profit expectations.
A better market that advocates for strict government oversight of the financial sector says the SEC’s withdrawal of lawsuits against Coinbase would be “a historical mistake.”
Dennis Kelleher, the group’s president and CEO, said in a statement: “The SEC is used to enforce the law without fear or pampering, but now prefers the cryptocurrency industry and is concerned about billionaire crypto Jinpeng ( Crypto Kingpins publicly disparages the agency.”
Coinbase shares opened up more than 3.5% as investors cheered the news. Piper Sandler analysts said in a study note that the case’s dismissal “eliminates a huge overhang, which we think has kept some investors on the court for nearly two years.”
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Former Democratic Chairman Gary Gensler, in his priorities for calling the Wild West (SEC) “Wild West” (SEC), targeting not only fraudsters, but also large-scale deals that promote transactions such as Coinbase company. As part of this effort, regulators have increased the size of crypto law enforcement.
The SEC has now scaled back its crypto enforcement efforts, reassigned lawyers, and renamed the department earlier this week to focus on “network and emerging technologies.”
Acting SEC Chairman Mark Uyeda and fellow Republican Commissioner Hester Peirce questioned Gensler’s approach to litigation, rather than argued over new encryption-specific rules.
“We have a very positive, productive relationship with this new SEC and are locking (on) the locking step on their arms to solve this problem,” Greval said.
Peirce is called Crypto Mom by many in many industries. According to the public logs available on the SEC website, the new task force held at least eight meetings to discuss the changes.
“I wouldn’t be surprised to see major cases resolved in the coming months,” said Nelson Mullins Riley & Scarborough law firm Richard Levin. .” ”
In his first week of office, Trump ordered the establishment of a cryptocurrency task force responsible for proposing new digital asset regulations and exploring the creation of national cryptocurrency inventory, thus well fulfilling his commitment to rapidly overhaul the U.S. crypto policy.
Trump solicited cash from the industry by pledging his position as “crypto president” during his campaign and pledging to facilitate adoption of digital assets.
Trump also ordered the protection of banking services of crypto companies in an executive order, and suggested that the industry claims that U.S. regulators have directed lenders to separate cryptocurrency companies from banking services, a regulator denial.
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