- The US SEC has agreed in principle to drop its legal battle against crypto exchange Coinbase.
- The Commission will require an official vote on the move, which could take place next week.
- Coinbase’s progress with the SEC has raised questions of Ripple and the agency reaching similar conclusions.
The United States (US) Securities & Exchange Commission (SEC) reached a conclusion “in principle” on Friday to end its legal action against crypto exchange Coinbase, subject to an official vote that may take place next week. As a result, crypto community members now anticipate the agency could also end its case against Ripple.
SEC moves to end regulatory brawl with crypto companies, begins with Coinbase
The US SEC is preparing to drop its legal battle against crypto exchange Coinbase following an agreement in principle between both parties.
In a blog post on Friday, Coinbase Chief Legal Officer Paul Grewal stated that the agency is “righting a major wrong” against the exchange with this move to settle.
“SEC staff has agreed in principle to dismiss its unlawful enforcement case against Coinbase, subject to Commissioner approval – righting a major wrong,” wrote Grewal.
Coinbase CEO Brian Armstrong highlighted that the Commission will require an official vote, which may take place next week, to finalize the move.
“Once approved by the Commission (which we’re told to expect next week) this would be a full dismissal, with $0 in fines paid and zero changes to our business,” Armstrong stated in an X post.
The battle between the SEC and Coinbase began in June 2023 after the regulator, under the leadership of Gary Gensler, filed a lawsuit against the exchange.
The agency charged Coinbase with operating as an unregistered national securities exchange, broker and clearing agency.
Coinbase challenged the SEC’s claims, asserting that many of the digital assets on its platform were not securities and maintained that it was right “on the facts and the law” regarding the case.
The exchange then filed a lawsuit against the agency in June 2024, requesting access to documents concerning crypto regulations.
The new development between the SEC and Coinbase has made rounds across the crypto industry and is seen as a major win for crypto.
Brian Armstrong stated that the approach from regulators could stir “a domino effect on other cases.”
Several crypto community members now anticipate a similar conclusion to the SEC’s case against Ripple, for which the agency recently filed an appeal against the initial ruling.
The five-year-long lawsuit dates back to December 2020 after the regulator sued Ripple and its founders, claiming the company acted as an unregistered securities broker in the sale of its tokens.
In July 2023, Judge Analisa Torres issued a ruling that partially favored Ripple, determining that XRP’s sales on public exchanges did not constitute securities transactions. However, she also ruled that XRP sales to institutional investors did violate securities laws.
In late 2024, Judge Torres fined Ripple $125 million for its violations but denied the SEC’s request for further financial penalties. The SEC appealed the ruling, challenging various aspects of Judge Torres’ conclusion.
Dropping the case against Ripple may be more complex than the agency has done with Coinbase, as a court already ruled on it.
According to Fox Business reporter Eleanor Terrett, Judge Torres “will retain jurisdiction” over the case for a one-year period, which will elapse on August 7, 2025.
The new SEC administration will need to wait until August if it intends to pursue a settlement with Ripple and its CEO, Brad Garlinghouse.
