Coinbase Wins Legal Battle Against the SEC
Coinbase has successfully emerged from a lengthy legal confrontation with the U.S. Securities and Exchange Commission (SEC), as the agency has agreed to withdraw the case that has been pivotal in shaping the regulatory landscape for the cryptocurrency industry. Although news of the SEC’s intention to dismiss the case became public when Coinbase announced the agreement last week, the commissioners were required to conduct a formal vote to request a federal judge to finalize the dismissal. This decision was made in a manner that prevents the regulator from reversing its stance in the future.
“It’s time for the commission to rectify its approach and develop crypto policy in a more transparent manner,” stated SEC Acting Chair Mark Uyeda in a formal announcement. SEC attorneys have already filed the necessary motion to dismiss the case.
However, the resolution of this primary case does not absolve the SEC from other ongoing legal matters involving Coinbase. These include the company’s petition urging the agency to establish clear regulations for the cryptocurrency sector, as well as Coinbase’s efforts to obtain internal documents related to the SEC’s private discussions on the regulation of digital assets.
This enforcement case has been a significant concern for the publicly traded company, as it aimed to clarify critical legal questions regarding the definition of a crypto security, and the circumstances under which a digital asset exchange must register with the SEC. These fundamental questions continue to remain unanswered and will now require legislative action from the U.S. Congress.
Following the departure of the SEC’s previous leadership—particularly the crypto-skeptical chair Gary Gensler—the interim chair, appointed by President Donald Trump, Mark Uyeda, has initiated a comprehensive overhaul of the agency’s legal team and its approach to digital assets. Uyeda appointed fellow Republican Commissioner Hester Peirce to lead the agency’s cryptocurrency task force, both of whom have publicly criticized Gensler’s regulatory approach toward the industry.
The digital assets sector did not have to wait for the confirmation of Paul Atkins, Trump’s nominee to permanently lead the SEC. Both Uyeda and Peirce served as counsels during his tenure as an SEC commissioner, leading to expectations that they will maintain a consistent trajectory in regulatory policy. So far, this trajectory has resulted in a wave of abandoned investigations and dropped cases against various crypto entities, including Robinhood, Gemini, and ConsenSys’s MetaMask, as well as pauses on matters concerning Tron and Binance.
The regulator has shifted its interpretation of the U.S. Supreme Court’s so-called Howey test, which previously suggested that many cryptocurrency projects qualified as securities.
The SEC’s change in stance regarding Coinbase, first reported by CoinDesk last week, will prompt the exchange to redirect its focus towards Congress and legislative initiatives, according to Chief Legal Officer Paul Grewal in a prior interview. Coinbase is among the companies in the digital assets sector that played a significant role in the establishment of the Fairshake PAC, which emerged during the 2004 elections, collectively investing over $160 million to support the election of candidates favorable to the cryptocurrency industry. Now, the company is looking to see a return on that investment through regulations that align with its interests.
The Fairshake PAC continues to influence the campaign finance landscape, actively participating in special elections as it gears up for the 2026 electoral cycle.
