The US Securities and Exchange Commission on Thursday filed to dismiss its lawsuit against Coinbase, the largest US cryptocurrency exchange, putting an end to a legal battle as the regulator moves to change course under President Donald Trump.
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The SEC sued Coinbase in 2023, alleging the exchange flouted the agency’s rules and facilitated trading in at least 13 crypto tokens that it said should have been registered as securities.
Coinbase had said last week that the SEC planned to withdraw the case.
Coinbase argued that crypto assets, unlike stocks and bonds, do not meet the definition of an investment contract, a position held by the vast majority of the crypto industry. As outlined in a US Supreme Court case, a key test for whether an investment product is a security is whether people are investing in a common enterprise with the expectation of profit.
The lawsuit also targeted Coinbase’s “staking” programme, in which it pools assets to verify activity on blockchain networks and takes commissions, in exchange for “rewards” to customers. The SEC said that programme should have been registered with the agency.
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The SEC also sued rival trading platform Binance in 2023. A court has separately paused the agency’s lawsuit against Binance after a joint request, citing implications of the SEC’s new crypto task force, which was established shortly after Trump took office last month.