SEC drops enforcement actions against Kraken, Consensys, and Cumberland DRW

On Thursday, the US Securities and Exchange Commission (SEC) scrapped its cases against Kraken, Consensys, and Cumberland DRW.

The agency filed joint stipulations with the companies, permanently dismissing the cases with prejudice and precluding any future refiling.

The commission, however, made it clear in each of the joint stipulations with Kraken, Consensys, and Cumberland DRW, that its choice to drop the enforcement actions does not necessarily reflect its position on any other case.

Kraken argues that the commission’s decision has ended a wasteful and politically motivated campaign.

In its press release on March 3, Kraken revealed that the SEC had consented to dismiss its lawsuit against the exchange without imposing any fines, demanding changes to Kraken’s operations or requiring any admission of fault.

Kraken commented on the decision: “It ends a wasteful, politically motivated campaign, lifts uncertainty that stifled innovation and investment, and clears the path toward a stable, forward-thinking regulatory regime.”

The exchange further stated that the agency’s choice represented a “turning point” for the crypto industry’s future in the US. 

On Thursday, Kraken’s CEO Dave Ripley even stated that he was glad they finally got rid of the litigation and could now focus on what really matters—building the future of finance.

Kraken was first charged in November 2023 with running an unregistered online trading platform and mismanaging customer funds.

Meanwhile, in June 2024, the SEC sued Consensys for illegally offering securities through its MetaMask staking platform. However, on Feb. 27, the commission voted in principle to drop cases against MetaMask. Subsequently, Consensys founder Joseph Lubin stated that despite having no plans to back down from the lawsuit, they accepted the SEC decision.

The commission originally announced that it would drop its case with Cumberland DRW on March 4. It originally charged the Chicago-based firm in October of 2024, alleging it operated as an unregistered broker by trading $2 billion worth of digital assets.

The SEC also dropped its cases against Coinbase and Ripple

The commission withdrew its case against Coinbase. In June 2023, the SEC first accused Coinbase of infringing on securities laws by combining its brokers, exchanges, and clearing agencies, which were meant to be kept separate.

On February 27, Coinbase Chief Legal Officer Paul Grewal said the agency had agreed to drop its lawsuit against them. Ripple, Robinhood, Gemini, Uniswap Labs, Crypto.com, and Immutable have claimed they had similar agreements with the commission.

Since Gary Gensler, the former chair of the SEC, resigned, the commission has taken a friendlier stance. The acting chair of the agency, Mark T. Uyeda, has even insisted that they introduce and enforce crypto policy more transparently going forward.