SEC Waves White Flag against Coinbase

The US Securities and Exchange Commission has consented to drop its case against Coinbase, a centralized exchange claimed was acting as an unlicensed securities broker.

Coinbase announced before the lawsuit is formally dismissed, the dismissal is still pending approval by an SEC commissioner.

Coinbase CEO Brian Armstrong said:
“If this goes through, it’s a big deal, not just for us, but for the whole crypto industry, the 50 million Americans who hold crypto, and I think for the rest of the world because this is an important signal about where things are going.”

The SEC, under the leadership of former Chair Gary Gensler, claimed that Coinbase had failed to register its staking services with the financial watchdog.

 The SEC filed a lawsuit against Coinbase  in 2023, labeling certain cryptocurrencies “unregistered securities.”

The “staking” feature on the platform, which enables users to earn incentives by blocking their assets to confirm transactions on a blockchain, was also the subject of the complaint.

Coinbase’s assertion that cryptocurrencies do not meet the criteria for an investment contract, in contrast to stocks and bonds, is supported by the cryptocurrency industry.

 The Nasdaq listed exchange criticized the SEC for taking the decision, claiming it was a regulatory overreach after approving the company’s public listing on US stock exchanges in 2021.

 The business started a political pressure campaign alongside Ripple that advocates for industry-friendly legislation with the U.S. government.

Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.