Friday, Cryptocurrency Exchange Coinbase said on Friday that the Securities and Exchange Commission had agreed to suppress its trial against the company, to raise a legal cloud on the global cryptography industry and to report a broader retirement of federal regulators.
Coinbase, in an article on his website and in a regulatory file, said that he had reached an agreement in principle with the SEC so that the trial was withdrawn without any financial penalty. If the SEC confirms the proposed regulations, it would be a remarkable reversal of the agency after years of legal battles against cryptographic companies.
The SEC continued Coinbase, the largest American crypto company, in 2023 on the grounds that the digital currencies sold on its platform constituted unregistered titles which put consumers in danger of financial damage.
Any regulation which leads to a rejection of the trial would require the approval of the SEC commissioners. A spokesperson for the agency refused to comment on Coinbase’s announcement.
The trial was the most important of several people that the SEC had deposited against large cryptography companies, arguing that they operated outside the law. A victory for the government could have threatened the continuous functioning of Coinbase, a listed company worth around 65 billion dollars, and decimated the larger cryptography market.
The dismissal would be the greatest victory in the cryptography industry since President Trump took office last month, promising to end the regulatory repression of the Biden administration against the crypto under the president of the previous dry , Gary Gensler. And that would underline the growing influence in Washington of billionaire technology leaders, who wrote enormous controls to support Mr. Trump’s campaign, hoping to obtain softer regulations.
Paul Grewal, the legal director of Coinbase, said in an interview that the agreement was “nothing less than a complete victory” – Coinbase would not have to admit to reprehensible acts or to pay a fine. The agency agreed to reject the case with prejudice, he said, which means that the trial cannot be brought.
“The case disappears as if it had never been deposited,” said Grewal.
Friday, he discussed the resolution proposed in a blog article entitled “Righting a major wrong”.
Dennis Kelleher, Managing Director of Better Markets, a non -profit organization that puts pressure on more transparency to Wall Street, said that the apparent “unilateral discount” of the SEC would undermine the commission’s confidence to regulate the markets and to Protect investors.
“SEC used to enforce the law without fear or favor, but now promotes cryptographic industry and feared the pingles of billionaires who publicly lower the agency,” said Kelleher.
Coinbase works as a market for cryptocurrencies-a platform where investors can easily convert dollars into digital active ingredients such as bitcoin or ether. Each time a sale takes place, the company collects fees.
Coinbase became a public in 2021, a benchmark for cryptographic industry in the United States. Its founder and chief executive officer, Brian Armstrong, has instantly become one of the richest technological executives in the country.
But the following year, the collapse of FTX, one of the best rivals in Coinbase, sent cryptographic markets to a merger. M. Gensler accelerated a repression against the industry he had started when he took over the agency in 2021.
His legal argument was simple: practically all cryptocurrencies are securities, just like the actions and obligations negotiated at Wall Street. Anyone who offers them should have to register with the SEC and follow strict rules to protect investors. He underlined a decision of the Centenary Supreme Court on what constituted an investment contract, arguing that it should govern digital assets.
As the best supplier of cryptocurrencies in the United States, Coinbase has become one of the main targets of M. Gensler. In the 2023 trial, the SEC argued that the company had “increased its interest in increasing its profits on the interests of investors and respecting the law”.
Under M. Gensler, the agency has filed similar prosecution against other best cryptography markets, such as Binance and Kraken. (These combinations are still pending.) The Crypto leaders argued that Mr. Pensler used unjust actions and an obsolete gaming book to regulate fast growing industry. They put pressure for federal legislation which would have given surveillance of the industry to the Commodity Futures Trading Commission, a regulator much smaller and less aggressive than the dry
A complex legal legal followed, with judges in various jurisdictions issuing sometimes contradictory opinions on the legal status of cryptocurrencies. Last year, the judge supervising the Coinbase affair rejected a request from the company to reject the trial, paving the way for a legal battle of a year which could have arrived at the Supreme Court.
But while cryptographic companies were fighting the dry in court, industry was also moving to reshape the political landscape.
Crypto leaders launched their support behind Mr. Trump, who launched his own crypto business last year. From rich technological investors like Marc Andreessen, whose venture capital company is a major investor in the crypto, cited Mr. Trump’s support for digital currencies as a key reason to support him.
The cryptographic industry has also sought to influence the congress: Coinbase was one of the best donors in Fairshake, a Super Pac crypto which gave more than $ 130 million to legislative candidates.
Since his victory, Trump has taken a series of measures to advance the interests of industry. He chose the venture capital investor David Sacks, an crypto enthusiast, as “crypto and tsar of the White House”. And he appointed Paul Atkins, a values lawyer
While Mr. Atkins awaits confirmation, Mark T. Uyeda, a republican commissioner of the Sec, directs the agency. This month, the SEC has reduced its efforts to apply cryptography, reallocating lawyers who had worked in a team of 50 people dedicated to cryptography.
Mr. Grewal, a former federal judge, refused to appoint the officials of the SEC who had negotiated the resolution of the case with Coinbase. But he said that the agreement had the “full support of leadership”. Next week, he said, the agency’s commissioners will vote to approve the agreement, a process which he described as a formality.
“Our end of this affair to these austere terms with the reduction of dry offers a model and a model,” said Grewal. “I hope ours will not be the last but rather the first of these cases to die for.”
Certain former dry lawyers have, however, expressed their concern about the benefits of the decision.
John Reed Stark, a former head of the FAC application and now a regulatory consultant, said it was rare that the Commission rejects business such as Coinbase One, in which a judge had already rejected a request to launch the dispute. He said it could affect the morale of the staff to the dry
“This radical turnaround has never taken place,” said Stark. “They have already cut the cryptographic unit in two. Each person who worked in this group is absolutely devastated. »»
