The US Securities and Exchange Commission (SEC) has officially dismissed three high-profile enforcement actions against prominent crypto firms: Kraken, Consensys Software, and Cumberland DRW LLC.
This decision under a new leadership with pro-innovation approach, made on March 27, allows these firms to operate without the looming threat of refiled charges, as the dismissals were issued with prejudice, meaning the cases cannot be brought back to court.
SEC Dismisses High-Profile Enforcement Actions
The SEC’s announcement did not delve into the merits of the original claims against these key crypto companies. Instead, the agency emphasized that the move reflects a broader recalibration of its regulatory stance towards the evolving crypto.
“The Commission’s decision to exercise its discretion… rests on its judgment that the dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry,” the SEC stated. Importantly, the agency clarified that this dismissal does not imply any change in its position regarding other ongoing cases.
The enforcement actions against these firms were part of a larger crackdown on the crypto industry, which the SEC has been intensifying over the past year, of course, under Gary Gensler’s leadership, characterized by a regulation by enforcement approach.
A Turning Point For Crypto Regulation
Kraken, one of the largest cryptocurrency exchanges in the US, faced allegations in November 2023 of operating an unregistered securities exchange, broker, dealer, and clearing agency. The SEC claimed that Kraken’s trading services violated several provisions of US securities laws.
Similarly, Consensys Software Inc. was charged in June 2024 for allegedly “unlawfully” offering and selling securities through its popular MetaMask Staking service. The SEC also accused the company of functioning as an unregistered broker via its MetaMask Swaps and Staking services.
Cumberland DRW LLC, a proprietary trading firm, was the subject of a complaint filed in October 2024, where regulators alleged that the firm acted as an unregistered dealer, citing over $2 billion in transactions involving crypto assets classified as securities.
The SEC’s decision to dismiss these cases has been interpreted as a pivotal moment in US crypto regulation, particularly following similar dismissals over the past few weeks involving other major players in the industry, including Coinbase, OpenSea, Robinhood and Ripple.
Experts view this as a potential turning point for crypto regulation in the country, suggesting that the SEC may be shifting towards a more accommodating regulatory framework further boosted by the support vowed by President Donald Trump during his presidential campaign and the first months of his second administration in the White House.
Featured image from DALL-E, chart from TradingView.com
