Feb. 21 (UPI) -- Coinbase said Friday that the Securities and Exchange Commission has agreed in principle to drop a federal lawsuit that charged the company with illegally selling securities.
The decision is subject to SEC commissioner approval but the company claimed that it was right and the SEC was wrong on the law in this case and the case "should never have been filed in the first place."
"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," Coinbase said.
The SEC charged Coinbase in 2023 with running an unregistered securities exchange because the company had failed to properly register a crypto staking program.
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At issue in the Coinbase case was whether crypto assets qualify as securities and should be regulated as securities.
In March 2024 U.S. District of Southern New York Judge Katherine Polk Failla allowed the SEC to continue the case based on the legal facts.
Failla said then that the SEC had a plausible case. The SEC said at the time that when companies don't register and are not regulated by the SEC, investors will get hurt and financial markets will suffer.
Coinbase alleged that a change in "political leadership at the SEC" resulted in the charges against it, accusing the Biden administration of waging a "war against crypto."
"Coinbase went public in April 2021. As part of that process, the SEC reviewed our business model and S1 disclosures and allowed us to go public," Coinbase said. "Two years later, they sued us. That's despite absolutely nothing changing in our business model."
The Trump administration has taken a different stance on crypto, with President Donald Trump signing an executive order in January to promote the advancement of cryptocurrencies and potentially create a national digital stockpile for the first time.
"To ensure innovation continues in America and a rogue regulator cannot weaponize the lack of clarity again, it is critical that we pass legislation which provides the long-term certainty needed for the U.S. to lead in this industry," Coinbase said on Friday.
