SEC drops Coinbase lawsuit; CEO Armstrong is “hugely” vindicated, gives credit to Trump

Coinbase, the largest crypto trading platform, said Friday that the SEC had dropped its enforcement case against the company, sending shares higher in early trading.

Coinbase announced the decision, which it said still needed approval from the SEC’s commissioner, in a post on its website. 

The dismissal underscores that the regulatory landscape is changing because of the new administration, which has hailed itself as “crypto-friendly.” 

“There will be no settlement or compromise — a wrong will simply be made right,” Coinbase Chief Legal Officer Paul Grewal added in an X post.

In his own lengthy post on X, Coinbase CEO Brian Armstrong said the decision was “hugely vindicating, especially because many people questioned my decision to engage in litigation with the SEC on this matter in 2023.”

The SEC filed a complaint against Coinbase in June 2023, alleging that it had “acted as an unregistered securities exchange, broker, and clearing agency,” according to regulatory filings. In addition, it alleged that Coinbase had not adequately registered its crypto-staking program.

Coinbase argued that this was part of the former administration’s “war against crypto.”

“After millions in legal costs and fees, countless employee hours, and years of protracted litigation, we have successfully protected our customers’ rights, and held the SEC accountable,” the company’s post said.

Alan Orwick, cofounder of Quai Network, a scalable and programmable proof-of-work blockchain, told Sherwood News that the announcement represents a massive regulatory shift for Coinbase and crypto in the United States.

“The SEC has spent years and millions of taxpayer dollars attempting to define the law in an emerging industry,” Orwick said, adding that ultimately, many cryptocurrencies are an entirely new asset class that cannot be viewed from a traditional securities lens.

“The SEC dismissing the Coinbase lawsuit proves that the prior administration was willfully wrong about many cryptocurrencies. It’s time to amend the reputation of the crypto industry and unlock a new era of innovation,” he said.

Ben Kurland, CEO at crypto research and charting platform DYOR, echoed the sentiment, saying that this is a defining moment — not just for the company, but for the entire crypto industry.

“At the same time, this isn’t a victory lap,” Kurland added, arguing that the US still lacks a structured regulatory framework for digital assets and companies continue to operate in uncertainty.

“Coinbase has long argued that it complies with the law, and this outcome reinforces that claim. But without a clear, enforceable set of guidelines, innovation will remain stalled and more crypto firms will move offshore,” he said. 

Armstrong has been very vocal about former SEC Chair Gary Gensler and the former administration for quite some time. Today, he argued that Gensler had “orchestrated this unlawful action along with Elizabeth Warren and a handful of their lackeys in Congress.”

“I called out the sketchy behavior of the SEC back in 2021, and I believe this comment turned out to be prescient,” he said.

He added that he has “to give credit to the Trump administration.”

The company reported its fourth-quarter earnings last week, with revenue climbing sharply and earnings easily beating Wall Street’s estimates. 

Coinbase was also one of the most significant contributors to the pro-crypto PAC Fairshake during the presidential campaign. Last week, the company also announced it will make additional donations in 2026 and beyond.

“I think we have access to all the relevant decision-makers and folks in government now,” Armstong said in the earnings call. “It doesn’t mean they’re all going to do what we want, but at least we can get meetings and share our point of view.”

Yaël Bizouati-Kennedy is a financial journalist who’s written for Dow Jones, The Financial Times Group, and Business Insider.