The US Securities and Exchange Commission (SEC) has agreed to drop its lawsuit against Kraken, marking a major reversal in its approach to crypto enforcement.
This decision comes amid a broader shift. In the past week, the SEC dropped at least six lawsuits and legal actions against crypto firms, including Coinbase and MetaMask.
SEC Vs. Kraken is Finally Over
The lawsuit against Kraken, filed in November 2023, accused the exchange of operating as an unregistered securities exchange, broker, dealer, and clearing agency.
The SEC claimed that Kraken allowed the trading of crypto asset securities without proper registration, depriving investors of necessary protections such as audits, disclosures, and oversight.
Kraken denied the allegations and argued that the SEC had failed to establish clear guidelines on whether digital assets should be classified as securities.
The exchange filed a motion to dismiss the case, citing regulatory uncertainty and a lack of fair notice. A federal judge allowed parts of Kraken’s defense to proceed, but the SEC continued to press its claims.
“The SEC’s decision to dismiss its lawsuit against us (and many others) is more than just a legal victory — it’s a turning point for the future of crypto in the US It ends a wasteful, politically motivated campaign, lifts uncertainty that stifled innovation and investment, and clears the path toward a stable, forward-thinking regulatory regime,” Kraken wrote in its official statement.
The agency’s decision to drop the lawsuit reflects a changing stance on crypto enforcement. Over the past week, it has quietly withdrawn multiple legal actions against major crypto companies.
No More Crypto Enforcement from the SEC
In addition to Coinbase and Kraken, the Commission has dropped its probe into Gemini, MetaMask, OpenSea, Tron Foundation, Robinhood, and others. The regulator also saw defeat in a particular crypto case that it actually wanted to pursue.
Over the weekend, the SEC lost a major case against Richard Heart, the founder of HEX and PulseChain.
This shift follows increasing pressure from lawmakers and industry leaders who have criticized the SEC’s aggressive regulatory approach. Although its current Commissioner is against dismissing these legal proceedings, it seems like the organization will no longer pursue aggressive enforcement.
“We beat the SEC! Congratulations to the best legal team in crypto. Fighting – and beating – the SEC was not foretold. Lawyers, lobbyists and everyone in between… We had to earn it,” wrote Marco Santori, Senior Advisor at Kraken.
Kraken’s victory may set a precedent for other crypto firms facing similar lawsuits. The decision to drop these cases signals a possible recalibration of the SEC’s strategy, raising questions about how crypto regulation will evolve in the coming months.
As of now, the Ripple XRP lawsuit is the only major crypto case still active for the Commission. However, given that Donald Trump has included XRP in his US crypto reserve plan, this lawsuit will likely be dropped in the same manner.
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