The United States Security and Exchange commission (SEC) has reached an agreement to settle the agelong legal battle against Coinbase exchange. Coinbase CEO, Brian Armstrong confirmed the development in a post on his official X page, stating that the dismissal is pending approval from the regulator.
According to the post, the exchange would incur $0 fine and zero changes to its business upon approval. Armstrong also highlighted the importance of the decision, describing it as vindictive.
In the post, Armstrong accused SEC of using “Mafia tactics” to pressure other companies not to work with Coinbase. He also added that the regulator was on the wrong side of the law, stating that it exceeded its congress-given authority by asking the exchange to delist assets that were not securities.
Armstrong added that giving in to the demand of SEC would have killed the crypto industry in America by pushing it “far into the shadows”. According to him, standing for Coinbase customers and the industry at large was the right and reasonable action to take.
Background to Coinbase & SEC lawsuit
Recall that the legal tussle started in 2023 after SEC sued Coinbase, saying the exchange allegedly operated an illegal exchange. The regulator accused Coinbase of acting as an unregistered exchange, broker and clearing agency. The complaint which was filed at the U.S. District Court for the Southern District of New York, alleged that Coinbase refused to register the offer and sale of its crypto asset staking as a service program.
SEC alleged that the exchange made over 13 crypto asset securities available to customers. Some of the assets listed by the regulator includes Solana SOL token, Cardano token and Protocol Labs Filecoin token. The regulator also added that Coinbase’s failure to register as a securities exchange deprived investors of being protected by law.
In addition, the regulator also alleged that the exchange’s holding company, Coinbase Global Inc. (CGI) , is a control person of Coinbase, as such liable for the misconduct of the exchange. According to SEC, the exchange and CGI violated the registration provision of Securities and Exchange Act of 1934.
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