Coinbase Freed from SEC Legal Battle

Coinbase has been freed from its protracted legal battle with the U.S. Securities and Exchange Commission (SEC) as the agency agreed to drop the case, a core issue in the industry.

The SEC had previously indicated its intention to resolve the dispute, and a formal vote was required to request a federal judge to dismiss the case. This dismissal was executed in a way that prevents the regulator from reversing its decision later.

SEC Acting Chair Mark Uyeda emphasized the need for the commission to rectify its approach and create crypto policy transparently. SEC legal representatives have already filed a motion to dismiss the case.

Although dropping this major case doesn’t eliminate other legal matters involving Coinbase, such as its petition for establishing crypto rules and pursuit of internal documents regarding the regulator’s deliberations on digital assets, it significantly alleviates the primary legal concern that the public company faced. This case sought to clarify fundamental questions about when and how a digital assets exchange should register with the SEC.

After the previous SEC leadership, particularly crypto skeptic chairman Gary Gensler, exited, Acting Chair Mark Uyeda began changing the agency’s approach toward digital assets. He appointed Commissioner Hester Peirce to head the crypto task force, both critics of Gensler’s methods, creating an expectation of continued reform.

Notably, the SEC is moving away from interpreting the U.S. Supreme Court’s Howey test, which had previously implied that numerous crypto projects fell under the category of securities.

The SEC’s shift in stance towards Coinbase prompts the exchange to redirect its focus to legislative efforts in Washington. Coinbase, among other digital asset firms, has significantly invested in the Fairshake PAC to promote pro-crypto candidates and is now aiming to influence regulations favorably.

The Fairshake PAC continues its activities, aiming to have an impact in upcoming elections as it prepares for the 2026 election cycle.

Read More: SEC Poised to Drop Coinbase Lawsuit, Marking Big Moment for U.S. Crypto