The United States Securities and Exchange Commission has dismissed its civil enforcement action against Coinbase Inc, the US-based cryptocurrency exchange, and Coinbase Global Inc, its holding company.

Coinbase has affiliated operations in Bermuda; Coinbase Bermuda Ltd and Coinbase Bermuda Services Ltd have been licensed by the Bermuda Monetary Authority under the Digital Asset Business Act since 2023.

The US entities have been battling with the SEC since the regulatory body levied charges on June 6, 2023.

The SEC said then: “The Securities and Exchange Commission today charged Coinbase Inc with operating its cryptoasset trading platform as an unregistered national securities exchange, broker and clearing agency. The SEC also charged Coinbase for failing to register the offer and sale of its cryptoasset staking-as-a-service programme.”

The SEC’s complaint also alleged that Coinbase’s holding company, Coinbase Global Inc, was a control person of Coinbase and was thus also liable for certain of Coinbase’s violations.

However, it has now dropped its claims and heralded a new approach by American regulators towards cryptocurrency operators.

On January 21, the SEC announced the formation of the Crypto Task Force, which is dedicated to helping develop a comprehensive and clear regulatory framework for cryptoassets.

Given the pending work of the task force, the SEC said it is dismissing the matter.

“For the last several years, the commission’s views on crypto have been largely expressed through enforcement actions without engaging the general public,” said acting chairman Mark T. Uyeda.

“It’s time for the commission to rectify its approach and develop crypto policy in a more transparent manner. The Crypto Task Force is designed to do just that.”

The SEC said its decision to exercise its discretion and dismiss this pending enforcement action rests on its judgment that the dismissal will facilitate the commission’s continuing efforts to reform and renew its regulatory approach to the crypto industry — not on any assessment of the merits of the claims alleged in the action.

Furthermore, as stated in the joint stipulation, the SEC said “the commission’s decision to seek dismissal of this litigation does not reflect the commission’s position on any other case”.

The regulatory agency added that its Cyber and Emerging Technologies Unit will root out those seeking to misuse innovation to harm investors, including fraud involving blockchain technology and cryptoassets.