Coinbase and the U.S. Securities and Exchange Commission (SEC) have reportedly reached an agreement in principle on halting the ongoing lawsuit against the crypto exchange. This reports FOX Business reporter Eleanor Terrett on X.

🚨BREAKING: @coinbase and the @SECGov have come to an agreement ‘in principle’ about dismissing the agency’s case against the exchange. The commission will need to do an official vote on the move which could happen as early as next week.
— Eleanor Terrett (@EleanorTerrett) February 21, 2025

Coinbase CEO Brian Armstrong confirmed the news in a video message. According to Armstrong, SEC staff informed the company that the regulator intends to withdraw the case. However, the final decision has yet to be approved internally by the SEC.

No fines or business changes

If the committee agrees to the proposal - which is prediction to happen next week - it will mean a complete end to the lawsuit, with no penalties and no need for Coinbase to adjust its operations, Armstrong said.

The SEC had filed a lawsuit against Coinbase in June 2023, alleging the company was operating as an "unlicensed securities exchange," according to the regulator. The legal battle dragged on ever since and took another turn in June 2024 when Coinbase in turn sued the SEC. The company accused the regulator of an unclear and inconsistent approach to crypto regulation.

"The SEC was legally wrong"

According to Armstrong, the SEC's recent change of course confirms that the regulator was legally wrong. "The SEC exceeded its powers granted by Congress by requiring us to delist certain assets that were not securities," Armstrong wrote in an extensive post on X.

He added that the US elections and Donald Trump's victory played a decisive role in this development. "I am convinced we would have won this case in court anyway, because our arguments were ironclad. But this political shift certainly accelerated the process and forced more accountability," Armstrong said.

COIN shares rise 4.2%

Following news of the expected dismissal of the case, Coinbase's COIN shares reacted with a 4.2% rise in pretrading.

Following the departure of SEC Chairman Gary Gensler, analysts were already predicting that the lawsuit might be dropped. Recently, the SEC and Coinbase also agreed to extend the term of the lawsuit due to internal structural changes within the regulator.

Coinbase now looks forward to "productive cooperation" with the SEC, as with other regulators worldwide, Armstrong stated in conclusion.