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The U.S. Securities and Exchange Commission (SEC) agreed on March 3 to dismiss its enforcement lawsuit against cryptocurrency exchange Kraken with prejudice, requiring no penalties or business changes.
This decision marks the latest in a series of case dismissals reflecting a dramatic regulatory pivot under new SEC leadership.
Kraken announced the agreement in a blog post, describing it as “more than just a legal victory—it’s a turning point for the future of crypto in the U.S.” The exchange called the previous SEC approach a “wasteful, politically motivated campaign” that hurt innovation.
The SEC’s decision follows similar dismissals against other major cryptocurrency firms, including Coinbase, Gemini, ConsenSys, and Robinhood. These moves show a clear shift away from former SEC Chair Gary Gensler’s “regulation by enforcement” strategy.
Acting SEC Chair Mark Uyeda has prioritized developing what he calls a “sensible regulatory path” for digital assets. The agency formed a Crypto Task Force led by Commissioner Hester Peirce to develop clearer rules.
“We appreciate the new leadership both at the White House and the Commission that led to this change,” Kraken stated. “Their bold and thoughtful leadership will lead to a new era of U.S. crypto innovation.”
Not everyone supports this regulatory pivot. SEC Commissioner Caroline Crenshaw, the commission’s sole Democrat, criticized the dismissal. “Today’s action creates more uncertainty. What exactly is the law as it applies to crypto assets?” Crenshaw questioned in the Coinbase case file.
The SEC sued Kraken in late 2023. They claimed the exchange ran without proper registration and mixed customer money with company funds. Rather than settling, Kraken contested the charges, with a federal judge initially saying the case could go forward.
The dismissal is “with prejudice,” meaning the SEC cannot refile the case. Kraken won’t pay any fines, admit wrongdoing, or change how it operates.
Many see this change as part of President Donald Trump’s pro-crypto stance. His SEC chair pick, Paul Atkins, has supported crypto in the past, suggesting this new direction will continue.
The outcome raises important questions about how regulatory agencies should approach emerging technologies. As this new chapter unfolds, the challenge will be striking the appropriate balance between fostering innovation and ensuring adequate consumer protection in an increasingly important sector of the global financial system.
