On Friday, the Cryptovalcurrency Exchange Coinbase said that the commission for securities and exchanges had agreed to abandon its cause against the company, raising a legal cloud on the global cryptocurrency industry and reporting a wider retreat from federal regulators.
Coinbase, in a post on its website and in a regulatory storage, said that she had reached an agreement in principle with the century to collect the cause without any financial sanction. If the century confirms the proposed settlement, it would be a considerable revision by the agency after years of legal battles against cryptocurrencies.
The sec sued Coinbase, the largest American cryptocurrency company, in 2023 on the basis that the digital currencies sold on its platform constituted unregistered securities that put consumers at risk of financial damage.
Any agreement that translates into a dismissal of the cause would require the approval of the commissioners of the century. A spokesman for the agency refused to comment on the Coinbase announcement.
The cause was the most significant of many that the century had presented against the main cryptocurrency companies, claiming that they operated outside the law. A victory for the government could have threatened the continuous operation of Coinbase, a company listed on the stock exchange for a value of approximately $ 65 billion and decimated the largest cryptocurrency market.
The dismissal would be the greatest victory for the cryptocurrency industry since President Trump came in office last month, promising to end the regulatory repression of the Biden administration on the cryptocurrency under the previous president of the century, Gary Gensler. And he would underline the growing influence to Washington of the managers of billionaire technology, who wrote enormous controls to support the Trump campaign, hoping to guarantee a softer regulation.
Paul Grewal, Coinbase’s Chief Legal Officer, said in an interview that the agreement was “to say the least a complete victory” – Coinbase should not have admitted any offense or pay a fine. The agency agreed to archive the case with prejudice, said, which means that the cause cannot be understood.
“The case disappears as if it had never been archived,” said Grewal.
On Friday, he discussed the resolution proposal in a blog post entitled “Righting a Great Wrong”.
Dennis Kelleher, CEO of Better Markets, a non -profit organization that pushes for greater transparency to Wall Street, said that the apparent “unilateral rendering” of the century would have to have confidence in the capacity of the commission to regulate the markets and protect the investors.
“The century used to enforce the law without fear or favor, but now it favors the cryptocurrency industry and fears that the billionaire cryptographic tracks that publicly diminish the agency,” said Kelleher.
Coinbase operates as a market for cryptocurrencies: a platform in which investors can easily convert dollars into digital resources such as Bitcoin or Ether. Every time a sale passes, the company is a commission.
Coinbase became public in 2021, a point of reference for the cryptocurrency industry in the United States. Its founder and CEO, Brian Armstrong, immediately became one of the richest technological managers in the country.
But the following year, the collapse of FTX, one of the best rivals of Coinbase, sent the cryptocurrency markets in a collapse. Mr. Gensler accelerated a repression of the sector he had started when he hired the agency in 2021.
His legal argument was simple: practically all cryptocurrencies are the titles, just like the actions and bonds exchanged at Wall Street. Anyone who offers them should register at the century and follow the rigorous rules to protect investors. He underlined a sentence of the Secular Supreme Court on what constituted an investment contract, claiming that he would have to govern digital activities.
As the main cryptocurrency supplier in the United States, Coinbase became one of the main objectives of Gensler. In the cause of 2023, the century claimed that the company had “raised its interest in increasing its profits for the interests of investors and compliance with the law”.
Under Mr. Gensler, the agency presented similar causes against other best cryptocurrency markets, such as Binance and Kraken. (These seeds are still in progress.) Cryptocurrency managers claimed that Mr. Gensler was using unjust application actions and an obsolete game book to regulate industry in rapid growth. They put pressure on federal legislation that would have given the supervision of industry to the Commission for the trade in future raw materials, a much smaller and less aggressive regulator than the century
A complex legal combat followed, with judges in various jurisdictions that emit sometimes conflicting opinions on the legal state of cryptocurrencies. Last year, the judge who supervises the Coinbase case rejected a motion by the company to reject the case, taking the foundations for a legal battle of years that could have achieved the Supreme Court.
But while the cryptocurrencies were fighting the sec in court, the industry was also mobilizing to remodel the political landscape.
Crypto managers launched their support behind Mr. Trump, who started his encryption activity last year. The rich technological investors such as Marc Andreesen, whose business company is a great investor in Crypto, mentioned the support of Mr. Trump for digital currencies as a key reason why they were supporting him.
The cryptocurrency industry has also tried to influence the congress: Coinbase was one of the best financiers of Farshake, a Super Pac crypt that has donated over 130 million dollars to legislative candidates.
From his victory, Trump has taken a series of measures to advance the interests of the sector. He chose the business investor David Sacks, a cryptocurrency enthusiast, such as “Crypto and Ai Czar of the White House. And he appointed Paul Atkins, a lawyer lawyer who consulted the cryptocurrency companies, to guide the century
While Mr. Atkins awaits confirmation, Mark T. Uyeda, a commissioner of the republican century, is leading the agency. This month, the century has resized his encryption efforts, reassigning the lawyers who had worked on a team of 50 people dedicated to the cases of cryptocurrency.
Grewal, former federal judge, refused to appoint the sec officials who had negotiated the resolution of the case with Coinbase. But he said the agreement had the “full support of the leadership”. Next week, he said, the agency’s commissioners will vote to approve the agreement, a process that has described as a formality.
“Our end of this case with such rigid conditions with the yield of the century offers a model and a model,” said Grewal. “I hope ours will not be the last but rather the first of these cases to fall.”
Some former lawyers of the century, however, have expressed concern about the repercussions from the decision.
John Reed Stark, a former SEC official and now a regulatory consultant, said that it was rare that the commission fired cases such as Coinbase One, in which a judge has already rejected a motion to eliminate the dispute. He said he could influence the moral of staff to the century
“This radical turnbo has never occurred,” Stark said. “They have already cut the cryptographic unit in half. Every single person who worked in this group is absolutely devastated. “