The U.S. Securities and Exchange Commission (SEC) has voluntarily dropped its lawsuit against the cryptocurrency exchange Kraken, signaling a significant shift in its enforcement approach toward cryptocurrencies.
A Turning Point for Crypto Regulation
Kraken confirmed that the lawsuit has been dismissed with prejudice, meaning the case cannot be refiled. Importantly, the exchange did not admit to any wrongdoing, nor did it pay penalties or alter its business operations. The SEC had initially sued Kraken in November 2023, alleging that the exchange functioned as an unregistered broker, dealer, exchange, and clearing agency. The move comes amid broader changes in the SEC’s approach to crypto enforcement, particularly following the departure of former SEC Chair Gary Gensler on January 20, 2025. Gensler, known for his aggressive regulatory tactics, oversaw more than 100 enforcement actions against crypto firms during his tenure.
Coinbase Pushes for Transparency
Amid these developments, Coinbase is pressing for transparency regarding the SEC’s past enforcement actions. The exchange has filed a Freedom of Information Act (FOIA) request to uncover how much taxpayer money was spent on crypto-related investigations and lawsuits between April 2021 and January 2025. Paul Grewal, Coinbase’s chief legal officer, emphasized the need to quantify the financial burden of the SEC’s 'regulation-by-enforcement' approach. Coinbase is specifically seeking details on: the total number of enforcement actions brought against crypto firms, the number of SEC employees and third-party contractors involved, the overall cost to taxpayers.
A Wave of Dismissals
The Kraken case is just one of several recent dismissals by the SEC. On February 27, the agency also dropped its lawsuit against Coinbase. Previously, it abandoned actions against Consensys, Uniswap, OpenSea, Gemini, and Robinhood. This trend reflects what many see as an evolving regulatory climate. The U.S. government is moving toward clearer legal frameworks for digital assets, with lawmakers introducing a stablecoin bill in early February aimed at reinforcing the dollar’s dominance. A more comprehensive crypto regulation bill may also be in the pipeline, potentially building on previous proposals like FIT21.
The SEC’s retreat from high-profile crypto lawsuits suggests a more structured regulatory approach could be on the horizon. While enforcement remains an essential tool, the industry has long called for clear, consistent rules rather than unpredictable legal battles. With President Trump positioning the U.S. as the 'world capital of crypto,' the coming months may bring further policy shifts that shape the future of digital assets in the U.S.
