Coinbase Says SEC Will Dismiss Lawsuit Against Company Next Week
Coinbase said Friday (Feb. 21) that Securities and Exchange Commission (SEC) staff have agreed in principle to dismiss the agency’s enforcement case against the cryptocurrency company, subject to commissioner approval.
“We’ve always maintained that we were right on the facts and the law, and today’s announcement confirms that this case should never have been filed in the first place,” Coinbase Chief Legal Officer Paul Grewal wrote in a Friday blog post. “This is a victory not just for Coinbase, but for our customers, the United States and individual freedom.”
Reached by PYMNTS, an SEC spokesperson declined to comment on Coinbase’s blog post.
Coinbase Co-founder and CEO Brian Armstrong said in a Friday post on X that the company has been told to expect commission approval next week.
Great news!
After years of litigation, millions of your taxpayer dollars spent, and irreparable harm done to the country, we reached an agreement with SEC staff to dismiss their litigation against Coinbase. Once approved by the Commission (which we’re told to expect next week)… pic.twitter.com/IlnoBs7N6n
— Brian Armstrong (@brian_armstrong) February 21, 2025
Armstrong added: “This would be a full dismissal, with $0 in fines paid and zero changes to our business.”
The SEC sued Coinbase in June 2023, alleging that the cryptocurrency exchange violated securities laws. The move followed a long-running conflict between the agency and the company.
The suit argued that Coinbase’s business “intertwines the traditional services of an exchange, broker, and clearing agency” without registering those functions with the SEC, as the law requires.
“You can’t simply ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great,” Gurbir S. Grewal, who was director of the SEC’s Division of Enforcement at the time, said in a press release announcing the suit.
Paul Grewal said in his Friday blog post that the SEC reviewed Coinbase’s business model and S1 disclosures and allowed the company to go public in April 2021, but then sued the company two years later, “despite absolutely nothing changing in our business model.”
“What changed over those two years was the political leadership at the SEC,” Paul Grewal said. “In its war against crypto it acted as if it was above the law, usurping the power of Congress as set forth in the Constitution.”
Paul Grewal said the dismissal is a win for the entire industry and the Americans who have owned digital assets, that legislation is needed to ensure innovation can continue in America, and that Coinbase looks forward to working with the SEC to “implement real change.”
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