Coinbase on Friday announced that the Securities and Exchange Commission agreed to drop its case against the cryptocurrency exchange. Shares surged early on the news, but reversed lower as the price of bitcoin fell following a major ethereum hack at Bybit. The announcement comes after Coinbase cleared Q4 expectations last week.
"We reached an agreement with SEC staff to dismiss their litigation against Coinbase," CEO Brian Armstrong posted online Friday. "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."
The SEC in June 2023 charged Coinbase with operating as an unregistered securities exchange, broker and clearing agency since at least 2019. The regulator also claimed Coinbase never registered its staking-as-a-service program as required by law.
The staking-as-a-service-program allows customers to earn profits by pooling crypto assets to perform blockchain transaction validation services.
The complaint also included a list of several cryptocurrencies that the SEC alleged were securities.
Armstrong gave credit to the Trump administration's election win, and to the departure of former SEC Chair Gary Gensler, who he characterized as an "activist head" of the agency.
"I expect we'll continue working productively with the SEC on any number of items over the years, just as we do with every agency around the world where we operate," Armstrong continued. "I look forward to the SEC being reformed under Paul Atkins, Mark Uyeda, Hester Peirce, and DOGE, and new more sensible personnel coming into leadership roles."
Armstrong concluded by calling for the U.S. to pass crypto legislation to "finally clarify the rules, and really kick off this next phase of building."
Coinbase And Bitcoin Stock Action
COIN stock advanced 3.5% early Friday after Armstrong's post, but reversed to close with an 8.3% decline. The stock has been consolidating since hitting a three-year high in early December.
Meanwhile, bitcoin climbed above $99,000 Friday morning. But bitcoin tumbled to $95,000 late Friday following a report that crypto exchange Bybit suffered a $1.4 billion ethereum after a planned transfer was manipulated. CEO Ben Zhou noted on social media that Bybit is solvent even if the hacked tokens are not recovered, as all client assets are backed one-to-one.
The world's largest cryptocurrency has held under $100,000 through most of February. Bitcoin hit a record high above $109,000 on Jan. 20 as President Trump's inauguration signaled a more crypto-friendly administration.
However, Trump's tariff plans and uncertainty for the next Federal Reserve rate cut have stalled momentum, despite digital asset executive orders and pro-crypto appointments.
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