SEC Dismisses Cases Against Crypto.com and Leading Crypto Firms

• The SEC has dropped lawsuit against Crypto.com with no actions being taken against the firm. 
• These cases involved allegations of operating as unregistered securities entities. 
• The back-to-back dismissals prove the SEC’s changing stance on crypto regulation. 

In a series of crypto developments, the US Securities and Exchange Commission (SEC) has yet again dropped its lawsuits against several major crypto firms, including Crypto.com,  Kraken, ConsenSys, and Cumberland DRW. This move signals a shift in the regulatory landscape under new SEC leadership. 

In August 2024, Crypto.com received a Wells notice from the SEC, indicating enforcement action for allegedly offering unregistered securities.  In response to that on October 8, 2024, Crypto.com filed a lawsuit against the SEC, asserting that the agency had overstepped its authority by classifying various crypto transactions as securities without adhering to the proper legal processes. 

The lawsuit claimed that the SEC’s actions were unfair and inconsistent. Additionally, Crypto.com argued that the SEC’s approach lacked the required notice and comment period mandated by the Administrative Procedure Act. 

Kris Marszalek, the CEO of Crypto.com, said, “The SEC’s unauthorised over-reach and unlawful rulemaking regarding crypto must stop.” Now, following the lawsuit drop announcement and being declared that no actions were taken, Mark posted in X on March 27, stating

They used every tool available to attempt to stifle us, restricting access to banking, auditors, investors, and beyond. It was a calculated attempt to put an end to the industry. The fact that we not only persevered but became stronger is a testament to our vision and the community supporting it. Onwards!

Related: SEC Concludes 3-Year Long Investigation Into Yuga Labs

Other Key Dismissals

Under former SEC Chair Gary Gensler, the agency took a hardline stance, filing numerous lawsuits. However, with Acting Chair Mark Uyeda and Commissioner Hester Peirce, the SEC shifted course. As a result of this shift, the SEC has also dropped litigation against other crypto firms including Kraken, ConsenSys, and Cumberland DRW by filing joint stipulations. 

Previously, the agency agreed to drop the probes and has now officially closed them all.  This regulatory development also resulted in a 12.3% increase for Kraken’s native token KRAKEN, going from $1.25 to $1.40. Similarly, ConsenSys’s CNS token rose by 9.8% from $0.85 to $0.93. Apart from this, while Cumberland doesn’t have a native token, it had a 25% increase in total trading volume compared to the previous day. 

These dismissals have been widely welcomed in the crypto sector, with industry leaders calling it a victory for regulatory clarity. It has also played a crucial part in the broader pivot that the US government is actively pursuing under the ruling President Donald Trump to position the US as a global leader in digital assets. Further, the SEC’s shift from being an enforcer to providing clarity signals the onset of a new era, which opens doors for innovation and increased interest in the blockchain industry.

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