The new SEC administration has dismissed cases related to cryptocurrencies outside of fraud. Remarkably, even the long-standing XRP Coin case was dropped. However, a report from the New York Times today revealed that Coinbase still faces ongoing legal challenges.
Cryptocurrency Case Unfolds
Following Trump’s election, the SEC administration was purged of crypto adversaries. Gensler was replaced by the crypto-friendly chairman, Paul Atkins. In this overhaul, the lawsuit filed against the Coinbase exchange for illegally marketing cryptocurrencies was dismissed.
Despite these developments, sources close to the matter report that the U.S. SEC is still conducting an investigation regarding Coinbase. This inquiry focuses on whether the number of its users has been misrepresented, with the process still in motion.
The investigation initiated during the Biden administration scrutinizes the claim of “over 100 million verified users.” The SEC, doubting whether this number of verified users exists, put Coinbase under examination. Despite this claim being present in their 2021 IPO documentation, Coinbase stopped promoting this figure as of 2023.
Future of Cryptocurrency Legal Battles
Coinbase’s Chief Legal Officer, Paul Grewal, acknowledged that there is an ongoing investigation initiated during the Biden administration concerning a metric they have not updated for over two years.
“While we strongly believe that this investigation should not continue, we are committed to working with the SEC to bring this matter to a close.”
The SEC is determined to conclude all non-fraudulent cryptocurrency cases. Necessary actions have been taken to end numerous crypto lawsuits and investigations. However, the ongoing investigation into Coinbase points to a potential discrepancy regarding the publicly declared number of users, indicating a possibility of deception.
Insider sources reveal requests for information about Coinbase’s verified user numbers. Should discrepancies arise, Coinbase could face penalties, as the issue goes beyond crypto matters. Similar to a bank claiming “100 million active users” only to face scrutiny, this issue might be non-crypto-specific, thus the investigation persists.
Fortunately, this detail does not indicate a shift in Trump administration’s stance on cryptocurrency policies. Even if Trump returns, investigations can still be initiated and concluded based on misleading information or other reasons. However, unlike Gensler’s approach, no crypto firm will be told to leave the U.S. without regulations. Instead, rules will be swiftly established.
