US regulators seem to be softening their stance on cryptocurrency under Trump’s pro-crypto administration. The Securities and Exchange Commission (SEC) just agreed to dismiss its lawsuit against Coinbase. This development, announced by the exchange, marks a significant victory for the exchange, after heightened scrutiny in the previous administration.

“SEC staff has agreed in principle to dismiss its unlawful enforcement case against Coinbase, subject to Commissioner approval—righting a major wrong. 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,” the exchange announced today (Friday).

A Long and Costly Legal Battle

The lawsuit, which accused Coinbase of operating as an unregistered securities broker, has been a focal point in the broader regulatory battle between crypto firms and US authorities.

The SEC’s lawsuit against Coinbase, filed in June 2023, was part of a broader crackdown on the cryptocurrency industry. The agency sought to categorize many crypto firms and their services as securities-related businesses requiring registration.

Coinbase CEO Brian Armstrong emphasized the significance of the SEC’s reversal, stating, “If this goes through, it’s a really big deal, not just for us, but for the whole crypto industry. The 50 million Americans who hold crypto, and I think for the rest of the world because this is an important signal about where things are going.”

Coinbase, which went public in April 2021 after SEC approval, argued that its business model had remained unchanged and that the lawsuit was unjustified.

Coinbase has long maintained that the SEC’s case was unjustified and politically motivated. “What changed over those two years was the political leadership at the SEC,” Coinbase stated. “In its war against crypto, it acted as if it was above the law, usurping the power of Congress as set forth in the Constitution.”

The exchange criticized the SEC’s approach, arguing that regulatory uncertainty has stifled innovation and placed unnecessary financial burdens on companies operating in the space. Millions in legal costs, extensive employee hours, and years of litigation have shaped this battle, underscoring the need for clearer legislative frameworks.

The latest announcement seems to have boosted the prices of several cryptocurrencies . At the time of publication, Bitcoin was nearing 100k, trading at $98,674, representing a 1% and 1.3% increase in the past day and week, according to CoinMarketCap. Early this year, a federal appeals court ruled in favor of Coinbase, faulting the SEC over its refusal to establish clear regulations for cryptocurrency.

A Win for the Industry

While the lawsuit’s dismissal is a significant win for Coinbase, its broader impact on the industry is even more notable. The company believes this outcome reinforces the need for long-term legislative clarity to ensure the US remains competitive in the global crypto economy.

Coinbase emphasized that regulatory clarity could attract new capital inflows, modernize financial systems, and lower consumer fees. The company envisions a future where “the majority of global GDP runs on crypto rails” and argues that the US must take proactive steps to embrace this transformation rather than being left behind.

With the SEC’s lawsuit likely ending, attention now turns to potential legislative action. Coinbase has called for Congress to establish clear guidelines to prevent future regulatory overreach and provide certainty for businesses and investors alike.