- The SEC dismissed lawsuits against Kraken, Consensys, and Cumberland, reflecting a shift toward a less enforcement-heavy approach to regulating the crypto industry under the new administration
- Kraken was accused of operating as an unregistered securities exchange and offering unregistered securities, with the case against it now dismissed with prejudice
- Consensys and Cumberland faced allegations related to unregistered activities; the SEC’s dismissals signal evolving priorities and a reevaluation of its regulatory strategy
Under the new administration, the U.S. Securities and Exchange Commission has taken a new stance on crypto — effectively dismissing lawsuits against several cryptocurrency firms like Ripple and Coinbase.
Now, the Commission dismissed several cases on the same day, following suit with its stance of being less retaliatory against DeFi companies. In a swift, the SEC dismissed cases against Kraken, Consensy, and Cumberland on March 27.
Kraken
Kraken entered the SEC’s radar in November 2023. At the time, the Commission under then-Chair Gary Gensler accused the company of illegally operating as an unregistered securities exchange, broker, dealer, and clearing agency in the United States. Kraken was also accused of offering unregistered securities, adding fuel to the long-running debate of whether altcoins should be classified as securities or not.
Now, just short of two years later, the SEC dismissed its case against Kraken with prejudice — meaning the same case cannot be re-opened in the future. Much like the other legal turnarounds, this outcome is seen as a substantial win for the crypto industry, which has long criticized the SEC’s aggressive stance.
Consensys
In June of 2024, Gary Gensler went after Consensys, particularly focusing on its Metamask Staking service. At the time the SEC claimed that the exchange broke federal securities laws by distributing liquid staking tokens like stETH and rETH. Similarly, the SEC dropped all accusations against Consensys with no prejudice.
Cumberland
In October of last year, the Securities and Exchange Commission alleged that Cumberland also acted as an unregistered dealer, engaging in over $2 billion worth of trades of cryptocurrencies then classified as securities. The firm specialized in providing liquidity to the market was also accused of bypassing investor protection registrations under federal securities laws.
The SEC alleged that Cumberland acted as an unregistered dealer in crypto markets, engaging in over $2 billion worth of trades involving crypto assets classified as securities. By failing to register, Cumberland was accused of bypassing critical investor protections under federal securities laws. While specific details of the dismissal are less clear, this move aligns with the SEC’s recent trend of pausing or dropping enforcement actions against crypto firms. The lawsuit was also dropped with prejudice.
New SEC Stance
This wave of dismissals reflects a changing regulatory landscape for the crypto industry in the U.S. It suggests that the SEC may be reevaluating its approach to fostering innovation while ensuring investor protection.
According to the Commission itself, the recent dismissals do not necessarily reflect the SEC’s position — but rather an effort to “facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry”.
If you’re considering a new trading platform, check out Phemex! They’re offering a $100 position voucher through their Rewards Hub when you complete a few tasks. This is a limited-time deal, so act fast before it’s gone!
