The SEC has officially dropped its lawsuit against Kraken today, ending what had been a high-profile battle between US regulators and the crypto exchange.
The agency dismissed the case with prejudice, meaning it cannot be refiled. According to Kraken’s announcement, the exchange will pay no fines, make no business changes, and, most importantly, admit no wrongdoing.
“We appreciate the new leadership both at the White House and the Commission that led to this change. Their bold and thoughtful leadership will lead to a new era of U.S. crypto innovation,” said Kraken in its blog post.
Kraken wins, SEC retreats
The SEC’s decision comes as part of the massive overhaul in how the US government handles crypto. Under new SEC leadership, the agency is walking back several lawsuits and investigations that had been aimed at crypto firms.
In just five weeks, the SEC has also dropped cases against Coinbase, OpenSea, Gemini, and Uniswap Labs, which is a huge reversal from the aggressive enforcement approach under former SEC Chair Gary Gensler.
The SEC’s case against Kraken was controversial from the start. The agency had accused the exchange of operating illegally, despite the fact that Kraken had been running with the same business model for years.Â
Rather than work with crypto companies to establish clear regulations, the SEC had taken a sue-first, clarify-later approach—an approach that has evidently backfired.
We beat the SEC!
Congratulations to the best legal team in crypto.
Fighting – and beating – the SEC was not foretold. Lawyers, lobbyists and everyone in between… We had to earn it.
Details here: https://t.co/K35yRp6gKn https://t.co/sGPFOF4q1W
— Marco Santori (@msantoriESQ) March 3, 2025
Kraken said, “This case was never about protecting investors — it and other enforcement actions clouded instead of clarified. It undermined a nascent industry that repeatedly urged clear rules of the road.”
Kraken maintained its stance throughout the legal battle, refusing to settle or make concessions. The SEC, facing increasing political pressure, ultimately walked away.
Politics and crypto collide
The timing of these SEC reversals is not random. Just over a month after Donald Trump took office, the agency’s position on crypto has completely changed. The yearslong crackdown on the industry—once led by Gensler under Biden’s administration—is now being dismantled.
Trump had campaigned on crypto. He promised to end the SEC’s enforcement crusade, and since taking office, that’s exactly what’s happening. The agency’s new acting chair, Mark Uyeda, has said that the SEC needs to “rectify its approach” to digital assets.
But the SEC’s makeover has brought some concerns about political influence, as some of the biggest winners of this regulatory overhaul are actually Trump’s business associates.
For instance, the SEC has decided that it will not regulate memecoins, which is particularly interesting because Trump himself launched a memecoin, $TRUMP, just two days before taking office. That token has generated hundreds of millions for Trump and his allies, according to a report from The Times.
