Ripple Next? SEC Officially Withdraws Securities Lawsuit Against Coinbase

Coinbase is in the clear after the U.S. Securities and Exchange Commission (SEC) followed through on its agreement and voluntarily dropped its enforcement case against the crypto exchange. The move further distances the Commission from its previous stance that the vast majority of crypto tokens were securities requiring registration.

Coinbase Lawsuit Dropped

On Thursday, the SEC officially requested to toss out its case against one of the largest crypto companies in the US without prejudice, meaning the regulator could not change its mind later.

“The Commission’s decision to exercise its discretion and dismiss this pending enforcement action rests on its judgement that the dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry, not on any assessment of the merits of the claims alleged in the action,” the SEC said in a statement.

Though Coinbase announced last week that the SEC had agreed in principle to end the legal dispute, the commissioners had to vote to request a judge dismiss the case.

The lawsuit against Coinbase dates back to June 2023, when the SEC sued Coinbase just two years after the exchange went public. The regulator at the time accused Coinbase of violating U.S. securities laws by operating an unregistered exchange.

New Task Force, New Rules

After the exit of crypto foe chair Gary Gensler, the temporary chair appointed by President Donald Trump, Mark Uyeda, started reshaping the agency to be increasingly pro-crypto. Uyeda named fellow Republican Commissioner Hester Peirce to lead the SEC’s new crypto task force.

“It’s time for the commission to rectify its approach and develop crypto policy in a more transparent manner. The Crypto Task Force is designed to do just that.” SEC Acting Chair Uyeda posited on Thursday. 

The statement marks the first public comments from the SEC clarifying why it has decided, over the past two weeks, to end lawsuits and probes into some of the crypto industry’s top players, including Robinhood, Uniswap Labs, OpenSea, and Consensys. Experts speculate that the regulatory agency will soon abandon its controversial appeal in the Ripple case.