In a major win for the crypto sector, the U.S. Securities and Exchange Commission (SEC) has agreed to drop its enforcement case against Coinbase, pending commissioner approval. This marks a significant shift in regulatory stance, aligning with the pro-crypto approach of the new administration under President Donald Trump.

Coinbase’s Legal Battle with the SEC

The SEC sued Coinbase in 2023, accusing the exchange of operating an unregistered securities platform and failing to register its staking program. The case, initiated under former SEC Chair Gary Gensler, reflected the regulator’s aggressive approach toward crypto firms. However, the tides have turned under Trump’s leadership, with Paul Atkins, a crypto-friendly nominee, expected to lead the SEC.

Coinbase CEO Brian Armstrong hailed the decision as a “huge day” for the industry. Speaking on CNBC’s Squawk Box, he emphasized that the company would not pay any fines, calling past enforcement actions “unlawful attacks” on the crypto space.

A New Regulatory Landscape for Crypto

A key issue in Coinbase’s case was the classification of certain crypto assets as securities. The SEC under Gensler sought to enforce traditional securities laws on digital assets, a move widely opposed by the industry. With the case now dismissed, it signals a potential shift toward clearer and more favorable regulations.

Trump’s administration has shown strong support for crypto, with the president attending the 2024 Bitcoin Conference and accepting industry donations. He has also signed an executive order to establish a dedicated crypto regulatory framework, aiming to provide long-overdue clarity.

Market Reaction and Bitcoin’s Record High

The news of the SEC backing down boosted Coinbase shares by 3% in early trading. The broader crypto market has also rallied since Trump’s election, with Bitcoin surpassing the $100,000 mark for the first time. Meme coins, including a Trump-backed digital token, have seen renewed investor interest.

As regulatory uncertainty diminishes, the crypto industry is poised for a new era of growth. The dismissal of Coinbase’s case could set a precedent, potentially leading to the end of similar legal battles faced by other crypto firms.