Coinbase has been freed from its protracted legal battle with the U.S. Securities and Exchange Commission as the agency agreed to drop the case that’s been among the industry’s core fights in federal court.
Though the SEC’s intention to agree to shut down the legal dispute had already gone public when the U.S. crypto exchange announced the deal last week, the commissioners had to cast a formal vote to ask a federal judge to throw the switch. The dismissal was done in such a way that the regulator can’t change its mind later.
“It’s time for the commission to rectify its approach and develop crypto policy in a more transparent manner,” SEC Acting Chair Mark Uyeda said in a statement. SEC lawyers already filed a motion to dismiss the case
Dropping this main case doesn’t free the SEC from other Coinbase legal matters, including the company’s petition to force the agency to establish crypto rules and Coinbase’s pursuit of internal documents in the exchange’s ongoing work to reveal the regulator’s private deliberations on how to approach digital assets.
But this enforcement case was the top legal concern for the U.S. public company, and it sought to elevate the central legal questions of what makes a crypto security and when (and how) a digital assets exchange should register with the agency. Those fundamental questions still await answers that must now be provided by the U.S. Congress.
Once the SEC’s previous leadership departed — especially the crypto skeptic chairman, Gary Gensler — the temporary chair elevated by President Donald Trump, Mark Uyeda, began overhauling the agency’s legal officials and its stance on digital assets. Uyeda named fellow Republican Commissioner Hester Peirce to run the agency’s crypto task force, and both of them were vocal critics of the way Gensler approached the industry.
The digital assets sector didn’t have to wait for the confirmation of Paul Atkins, Trump’s pick to permanently run the agency, though both Uyeda and Peirce served as his counsels when he was a commissioner at the SEC, so they’re widely expected to be on a course he’ll maintain. So far, that course has seen a wave of abandoned crypto investigations and dropped cases, including against Robinhood, Gemini and ConsenSys’s MetaMask, and pauses of matters involving Tron and Binance.
The regulator is no longer maintaining the interpretation of the U.S. Supreme Court’s so-called Howey test that it said had indicated many crypto projects qualified as securities.
The SEC’s changed view on Coinbase, which CoinDesk was first to report on last week, will cause the exchange to shift its Washington focus toward Congress and legislation, Chief Legal Officer Paul Grewal told CoinDesk. The company is among the digital assets businesses that led the creation and deployment of the Fairshake PAC in the 2004 elections, collectively devoting more than $160 million to an effort to elect crypto-friendly candidates to office. Now Coinbase is seeking to get a return on that investment with regulations that it considers favorable.
The Fairshake PAC, which shook up the campaign-finance world with its outsized corporate spending levels, is still at it, dabbling in special elections as it prepares for the 2026 cycle.
Read More: SEC Poised to Drop Coinbase Lawsuit, Marking Big Moment for U.S. Crypto
