The Securities and Exchange Commission (SEC) is on the verge of dismissing its high-profile lawsuit against Coinbase, the largest cryptocurrency exchange in the United States, signaling a potential sea change in the regulatory landscape for digital assets. Coinbase announced on Friday, February 21, 2025, that the SEC staff has agreed in principle to drop the case, pending approval from the commission.
This development comes as a significant victory for Coinbase and the broader cryptocurrency industry, which has been grappling with regulatory uncertainty and enforcement actions in recent years. The lawsuit, filed in June 2023, accused Coinbase of operating as an unregistered securities exchange, broker, and clearing agency.
Paul Grewal, Coinbase’s Chief Legal Officer, hailed the decision as a “complete win” for the company. “Coinbase is committing to do nothing. We surrendered nothing,” Grewal stated, emphasizing that the dismissal would come without any penalties or changes to the company’s operations.
The potential dismissal of the case is seen as a reflection of the changing political landscape in Washington. The Trump administration, which took office in January 2025, has signaled a more favorable approach to cryptocurrency markets1. This shift is further underscored by the nomination of Paul Atkins, known for his crypto-friendly stance, as the new SEC chair, pending Senate confirmation.
The cryptocurrency sector has invested heavily in supporting Trump and other lawmakers sympathetic to digital currencies, aiming to solidify its presence in both political arenas and mainstream financial systems. Coinbase itself has been actively engaged in political advocacy, contributing substantial sums to political action committees supporting pro-crypto candidates.
The market responded positively to the news, with Coinbase’s stock surging 4.8% in premarket trading, reaching $268.51. The company’s share price has increased by 3.3% in 2025 up until Thursday. Bitcoin also saw an uptick, rising by over 1% to approximately $99,500.
This development follows closely on the heels of the SEC’s request to pause a similar lawsuit against Binance, citing the pending development of a regulatory framework for digital assets under the new administration. These actions suggest a broader retreat from the policies of former SEC Chair Gary Gensler, who had sought to regulate the industry through enforcement actions.
The dismissal, if approved, would alleviate a significant burden on Coinbase. Analysts had suggested that the firm might have needed to limit its coin listings had it lost the case against the SEC. With this legal hurdle potentially cleared, the company can focus on expanding its token listings and developing new products.
However, the SEC has yet to officially confirm this decision, and the final approval from the commissioners is still pending. The cryptocurrency community and industry observers are closely watching these developments, as they could have far-reaching implications for the future of digital asset regulation in the United States.
As the crypto industry celebrates this potential victory, questions remain about the long-term regulatory framework for digital assets. The outcome of this case may set a precedent for how other cryptocurrency-related legal challenges are handled in the future, potentially ushering in a new era of crypto regulation under the Trump administration.
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