As the crypto industry eagerly awaits regulatory clarity, some early glimpses of the new administration’s policy priorities may be found in resolutions of ongoing Securities and Exchange Commission cases against exchanges and other key market players. The Commission currently consists of three members and is led by acting SEC Chair Mark Uyeda. It has inherited a full docket of ongoing enforcement cases nationwide, many involving key market infrastructure. There also are numerous “impact litigation” cases ongoing that aim to require the SEC to engage in rulemaking. The Commission could resolve these cases by directing enforcement staff to dismiss certain matters or to begin settlement negotiations with the aim of settling the matters quickly.
The current three-person Commission has a quorum and does not need to wait for a new chair to be confirmed to resolve these ongoing cases. And many expect Uyeda to be an active interim chair.
The Commission has the potential opportunity to influence industry rules and norms by dismissing matters—or through the types and nature of remedies that are included in settlements. For example, the SEC could require digital asset exchanges to maintain a robust internal compliance program to avoid listing crypto assets that could be considered securities in order to avoid SEC registration requirements. The SEC could use the settlement to articulate a view on the circumstances under which secondary sales of digital assets will not be deemed to constitute securities transactions. A settlement might also specify that the assets at issue in those cases are commodities, providing some regulatory clarity with respect to those assets. In the “impact litigation” cases, a settlement may specify timelines or offer other clarity about what to expect from SEC rulemaking.
The industry will watch any dismissals or settlements closely as a signal of what the new SEC will require of similarly situated market actors.
Here are the most important cases we’re watching:
Case Caption | Assets At Issue | Allegations | Status |
SEC v. Coinbase, Inc., No. 1:23-cv-04738 (S.D.N.Y. Filed Jun. 6, 2023) Coinbase, Inc. v. SEC, No. 25-145 (2d Cir. Filed Jan. 21, 2025) | SOL | The SEC alleges Coinbase’s retail crypto exchange operates as an unregistered securities exchange and clearing agency. Coinbase Wallet and Coinbase Prime products allegedly serve as broker services. Coinbase’s staking-as-a-service offering allegedly operates as an unregistered offer and sale of a digital asset. | On January 7, 2025, the district court granted Coinbase’s motion for interlocutory appeal of the order denying in part their motion to dismiss. Coinbase filed their brief urging the Second Circuit Court of Appeals to take up the case, and the SEC will file a response shortly. The Second Circuit will now decide whether to take up the question of how Howey applies to secondary sales. |
SEC v. Binance Holdings Limited, No. 1:23-cv-01599 (D.D.C. Filed Jun. 5, 2023) | BNB | The SEC alleges Binance operates an unregistered securities exchange, broker, and clearing agency. The SEC also brings claims based on the alleged unregistered offer and sale of Binance’s BNB exchange token and their BUSD stablecoin. | The district court granted in part and denied in part defendants’ motions to dismiss the first complaint, and the SEC subsequently filed an amended complaint seeking to revive the dismissed claims. Defendants’ motions to dismiss the amended complaint are pending before the court and were fully briefed as of December 23, 2024. |
SEC v. Payward, Inc., No. 3:23-cv-06003, (N.D. Cal. Filed Nov. 20, 2023) | ADA | The SEC alleges that Payward (d/b/a Kraken) operates an unregistered securities exchange, broker, dealer, and clearing agency. The SEC also alleges that Kraken held and commingled customer assets and kept poor records. | Kraken’s motion to dismiss was denied on August 23, 2024. On January 24, 2025, the court partially granted the SEC’s motion for judgment on the pleadings, striking Kraken’s major questions doctrine affirmative defense, but denying the motion with respect to the fair notice and due process defenses. |
Case Caption | Assets At Issue | Allegations | Status |
SEC v. Consensys Software Inc., No. 1:24-cv-04578, (E.D.N.Y. Filed Jun. 28, 2024) | MATIC | The SEC alleges that Consensys, the company behind the popular noncustodial wallet MetaMask, acted as a securities broker by providing a crypto asset “swap” service within the wallet. The SEC also brings claims based on Consensys’ alleged unregistered sale and offer of two “liquid staking” programs (Lido and Rocket Pool). | Consensys answered the SEC’s complaint on November 1, 2024. |
SEC v. Coinbase, Inc., No. 1:23-cv-04738 (S.D.N.Y. Filed Jun. 6, 2023) Coinbase, Inc. v. SEC, No. 25-145 (2d Cir. Filed Jan. 21, 2025) | SOL | As noted above, the SEC alleges that Wallet and Coinbase Prime products allegedly serve as broker services. | See above. |
Case Caption | Assets At Issue | Allegations | Status |
SEC v. Cumberland DRW LLC, No. 1:24-cv-09842, (N.D. Ill. Filed Oct. 10, 2024) | MATIC/POL | The SEC alleges that Cumberland DRW acted as an unregistered securities dealer in violation of securities laws. | The SEC’s complaint was filed on October 10, 2024. On January 15, 2025, Cumberland DRW filed a motion to dismiss the SEC’s complaint. The SEC’s opposition is due on February 19, 2025. |
Case Caption | Assets At Issue | Allegations | Status |
Coinbase, Inc. v. SEC, No. 23-3202, (3d Cir. Filed Dec. 15, 2023) | BTC | Coinbase’s petition for review challenges the SEC’s denial of a rulemaking petition, alleging that the SEC violated the Administrative Procedure Act through arbitrary and capricious decision-making. | On January 13, 2025, the Third Circuit Court of Appeals granted Coinbase’s petition in part, remanding the SEC’s denial of Coinbase’s rulemaking petition back to the SEC. The Third Circuit ordered the SEC “to explain itself” in remand, asking the SEC to “not give yet another poor explanation” for its rulemaking and to grapple with the risks of “de facto banning” the crypto industry. Further action from the SEC is pending. |
Commonwealth of Kentucky v. SEC, No. 3:24-cv-00069 (E. D. Ky. Filed Nov. 14, 2024) | UNI | Eighteen states and industry group DeFi Education Fund allege that the SEC exceeded regulatory authority and preempted state laws by unilaterally asserting control of digital asset regulatory authority from the states and designating digital assets as investment contracts. Plaintiffs also allege that the SEC’s actions were an abuse of discretion in violation of the Administrative Procedure Act. | The SEC will respond to the complaint on February 20, 2025. |
Bitnomial Exchange, LLC v. SEC, No. 1:24-cv-09904, (N.D. Ill. Filed Oct. 10, 2024) | XRP | Contract market Bitnomial Exchange alleges that Bitnomial’s contemplated listing of XRP futures was threatened by the SEC as a potential violation of securities laws, preventing Bitnomial from listing. Bitnomial seeks a declaratory judgment that XRP futures are not security futures and that the SEC is improperly asserting regulation over commodities. | On January 17, 2025, the SEC and co-defendants filed a motion to dismiss Bitnomial’s complaint, or in the alternative, to stay proceedings pending the resolution of the appeal in SEC v. Ripple Labs Inc., Nos. 24-2648, -2705 (2d Cir.). Bitnomial’s opposition to the motion is due February 11, 2025. |
Mann v. SEC, No. 2:24-cv-01881, (E.D. La. Filed Jul. 29, 2024) | NFTs | Jonathan Mann and Brian Frye, two NFT artists, allege that the SEC exceeds regulatory authority when it asserts that NFTs constitute investment contracts, creating risks of securities laws violations. The plaintiffs seek a declaratory judgment that their NFTs do not violate securities law and seek enjoinment of a potential enforcement action by the SEC. | A hearing regarding the SEC’s motion to dismiss is set for February 26, 2025. |
Beba LLC v. SEC, No. 6:24-cv-00153 (W.D. Tex. Filed Mar. 25, 2024) | BEBA | Apparel company Beba LLC and industry group DeFi Education Fund allege the SEC adopted its digital asset policy without a formal notice-and-comment rulemaking process, in violation of the Administrative Procedure Act. Beba seeks declaratory judgment that the free airdrop distribution of its BEBA tokens does not constitute an investment contract and does not constitute an unregistered offering and sale of a security. | The SEC’s motion to dismiss is pending before the court, fully briefed as of November 20, 2024. |
LEJILEX v. SEC, No. 4:24-cv-00168 (N.D. Tex. Filed Feb. 21, 2024) | MANA | Digital asset platform operator LEJILEX and industry group the Crypto Freedom Association of Texas allege the SEC exceeded its regulatory power in recent enforcement actions by designating “nearly all” digital asset transactions as investment contracts. Plaintiffs seek declaratory judgment that LEJILEX’s future secondary sales platform, Legit.Exchange, will not facilitate the sale of securities and will not be an unregistered securities exchange, broker, or clearing agency in violation of securities laws. | Plaintiff’s motion for summary judgment and the SEC’s motion to dismiss are both fully briefed and pending before the court as of October 2, 2024. |