SEC set to drop case against Coinbase; shares spike

Investing.com - The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss an enforcement case against cryptocurrency exchange Coinbase (NASDAQ:COIN), pending approval from the Commission's leadership, according to the company on Friday.

Shares of Coinbase rose over 4.5% after the news. 

This development could mark the conclusion of a legal dispute that has highlighted the complex regulatory environment surrounding digital assets.

Coinbase became a publicly-traded company in April 2021 following a review of its business model and disclosures by the SEC. SEC initiated legal action against Coinbase two years later.

"We’ve always maintained that we were right on the facts and the law, and today’s announcement confirms that this case should never have been filed in the first place," Paul Grewal, Coinbase's Chief Legal Officer said. "This is a victory not just for Coinbase, but for our customers, the United States, and individual freedom." 

The legal battle has been costly for Coinbase, incurring millions of dollars in legal expenses and significant staff hours. The company claimed that it has maintained throughout the process that its operations were lawful and compliant with existing regulations.

Coinbase has called for legislative action to provide clarity and certainty for the cryptocurrency industry in the U.S., arguing that clear regulations are essential for innovation and economic freedom.

Coinbase said the dismissal of the case, if approved by the SEC Commissioners, is expected to have positive implications for the industry.