The crypto industry continues to rack up wins under President Donald Trump’s administration.
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Meanwhile, Trump has named Paul Atkins, a pro-crypto commissioner, to head the SEC. While Atkins has yet to be confirmed, acting chair Mark Uyeda has steered the agency away from its more aggressive approach to crypto enforcement under former chairman Gary Gensler.
Uyeda has launched a new Solana and Cardano, were securities, or financial assets under the purview of the SEC, such as stocks and bonds.
Because Coinbase listed the alleged securities without prior approval from the SEC, they were in violation, argued the SEC.
“You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: The consequences for the investing public are far too great,” Gurbir S. Grewal, director of the SEC’s division of enforcement, said when the lawsuit was first filed.
The crypto lobby
Coinbase, and the crypto industry as a whole, were incensed and argued that cryptocurrencies were new financial assets that did not fit into decades-old financial law. The legal definitions were unclear, and judges were split as parallel cases against different crypto companies worked their way through the courts.
Coinbase’s case appeared before Judge Katherine Failla in the Southern District of New York. In March 2024, she largely rejected Coinbase’s motion to dismiss the lawsuit, disagreeing that the SEC had violated Coinbase’s right to due process by not providing “fair notice” of which crypto assets should be considered securities. She also rejected Coinbase’s argument that the “Major Questions doctrine,” a legal principle that limits agency supervision over issues of major political and economic significance, should apply to the crypto industry.
Despite the setback for Coinbase, the crypto exchange asked for an interlocutory appeal—meaning the case would move to the appeals stage before the judge reached a final decision—amid disagreement at the district court level. Failla granted the request last month.
Meanwhile, Coinbase pushed its case in the public sphere.
Brian Armstrong, the CEO of Coinbase, joined forces with industry leaders like Brad Garlinghouse, the CEO of Ripple, to launch an unprecedented influence campaign to sway politicians to support crypto. They spent more than $130 million up and down the ballot to elect pro-crypto candidates in the 2024 elections, according to data compiled by Molly White, a crypto researcher.
And after Trump was elected, Armstrong met privately with the 47th president. Then, Coinbase and a host of other top crypto companies, including Kraken and Ripple, each donated $1 million to Trump’s inauguration fund. The SEC’s decision to drop the lawsuit came just a month after Gensler resigned as chair of the SEC.
“I have to give credit here to the Trump administration, for winning the election, and for the departure of the activist head of the SEC, Gary Gensler,” Armstrong said.
