SEC Drops Cases Against Crypto.com, Kraken, Consensys

The U.S. Securities and Exchange Commission ( SEC ) has officially closed a number of cases against the crypto industry, including Crypto.com , Kraken , and Consensys .

In a statement , Crypto.com revealed that the regulator had dropped its case and will not file enforcement against it.

“We are pleased that the current SEC leadership has made the decision to close its investigation into Crypto.com with no enforcement action or settlement,” said Nick Lundgren, Chief Legal Officer of Crypto.com.

“Under the previous administration, the SEC weaponized and attempted to expand its congressionally granted power in order to harm an industry that its former chair disfavored. It is unfortunate that we were forced to endure this years-long investigation and file our own suit against the SEC to protect the rule of law. Compliance and integrity are core to Crypto.com’s business and we are excited to work with soon-to-be-confirmed Chair Atkins and the rest of the Commission on our long-awaited desire for legislation and rulemaking.”

The move comes months after Crypto.com received a Wells Notice from the regulator on 22 August. A Wells Notice is usually sent ahead of launching a formal lawsuit.

OpenSea , Coinbase , Uniswap Labs , Ripple , Robinhood , Consensys , and BUSD issuer Paxos are among those in the increasing list of crypto firms that have received such notices.

In three separate announcements on 27 March, the SEC stated it is also dismissing its cases against Cumberland, Consensys, and Kraken.

"The Securities and Exchange Commission today filed a joint stipulation with Payward Inc. and Payward Ventures Inc., together known as Kraken, to dismiss, with prejudice, the Commission’s ongoing civil enforcement action against it," the regulator stated in one filing .

According to an SEC press release , the charges against Kraken stem from allegations that the exchange has been offering and selling unregistered securities through its staking-as-a-service program. The SEC contends that Kraken's program, which allows customers to earn rewards by staking their crypto assets, constitutes an offer and sale of securities, thus falling under the regulatory purview of the commission.

Similarly, the SEC stated in its filing about Consensys, "The Securities and Exchange Commission today filed a joint stipulation with Consensys Software Inc. to dismiss, with prejudice, the Commission’s ongoing civil enforcement action against it."

Like Crypto.com, Consensys was handed a Wells Notice in April 2024. The Wells Notice is not a formal prosecution or regulatory enforcement document.

Consensys claimed the SEC had classified Ethereum as a security and has "trained its sights" on the firm's MetaMask wallet product. The firm denies acting as a broker, clarifying that the wallet is “simply an interface” and “neither holds customers’ digital assets nor carries out any transaction functions.”

Finally, its Cumberland filing read, "The Securities and Exchange Commission today filed a joint stipulation with Cumberland DRW LLC to dismiss, with prejudice, the Commission’s ongoing civil enforcement action against it." The regulator alleged that the firm operated as an unregistered dealer, pointing to over $2 billion in transactions involving crypto assets classified as securities by the SEC.

The SEC's retractions follow a string of cases being dropped by the regulator. Last week, Ripple CEO Brad Garlinghouse revealed that the US Securities and Exchange Commission SEC abandoned its appeal in its case against the company.

“It’s been almost four years and about three months since the SEC originally sued us, certainly a painful journey in lots of ways,” Garlinghouse said at the Digital Assets Summit in New York. “I really deeply believed that we were going to be on the right side of the law and on the right side of history.”

Over the past month, the SEC has dropped investigations and lawsuits against a number of crypto companies, including Uniswap Labs , Robinhood , OpenSea , Coinbase , and Yuga Labs .