SEC formally dismisses enforcement action against Kraken, Consensys and Cumberland DRW

The U.S. Securities and Exchange Commission officially dropped its cases against Kraken , Consensys and Cumberland DRW in respective announcements late Thursday.

The agency said it had filed joint stipulations with the firms on March 27 to dismiss its ongoing civil enforcement actions against them with prejudice — meaning that the cases are dismissed in such a way that they cannot be brought back to court.

"The Commission's decision to exercise its discretion and dismiss this pending enforcement action rests on its judgment that the dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry, not on any assessment of the merits of the claims alleged in the action," the SEC said in each of the releases. "Furthermore, as stated in the joint stipulation, the Commission's decision to seek dismissal of this Litigation does not necessarily reflect the Commission’s position on any other case."

Kraken said the SEC had agreed in principle to to drop its lawsuit against the crypto exchange on March 3, without admission of wrongdoing, penalties paid or alterations to Kraken's business model. "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 firm said at the time. The agency initially brought a suit against Kraken in November 2023 for allegedly operating as an unregistered online trading platform and mishandling customer funds.

"Glad to finally close this chapter," Kraken co-CEO Dave Ripley said on Thursday. "Back to what really matters, building the future of finance."

The SEC also agreed in principle to end its case against MetaMask on Feb. 27, according to Joseph Lubin, the founder of the popular web3 wallet's developer Consensys. "We were committed to fighting this suit until the bitter end but welcome this outcome," Lubin said at the time. The SEC sued Consensys in June 2024, alleging the blockchain software company had violated U.S. securities law through its MetaMask staking service.  

Cumberland DRW said it had signed an agreement with the SEC to drop its case against the crypto trading firm on March 4. "As a firm deeply committed to the principles of integrity and transparency, we look forward to continuing our dialogue with the SEC to help shape a future where technological advancements and regulatory clarity go hand in hand, ensuring that the U.S. remains at the forefront of global financial innovation," Cumberland said at the time. The SEC sued Cumberland in October 2024, alleging it acted as an unregistered dealer when trading $2 billion in crypto. 

However, the Commission still had to vote officially to drop each of the cases, which concluded ahead of Thursday's announcements.

SEC dropping slew of cases against crypto firms under Trump administration

The SEC's closure of its cases against Kraken, Consensys and Cumberland DRW follow its request to officially dismiss its lawsuit against crypto exchange giant Coinbase on Feb. 27 — about a week after Coinbase Chief Legal Officer Paul Grewal confirmed there had been an agreement to do so in principle. The agency had previously alleged that Coinbase violated U.S. securities laws by merging three functions typically kept separate: brokers, exchanges and clearing agencies.

The SEC has taken a very different stance toward the crypto industry since the U.S. presidential election, frequently criticized by many for its regulation-by-enforcement approach under former Chair Gary Gensler. Gensler left the agency in January following the inauguration of pro-crypto President Trump. Crypto-friendly former regulator Paul Atkins was tapped by Trump to lead the SEC under the new administration, pending Senate confirmation . Meanwhile, the SEC has also established a new crypto task force under the leadership of Commissioner Hester Peirce, aimed at creating a clear regulatory framework for cryptocurrencies — in stark contrast to its regulation-by-enforcement approach under Gensler.

"For the last several years, the Commission’s views on crypto have been largely expressed through enforcement actions without engaging the general public," SEC Acting Chair Mark T. Uyeda said following the dismissal of its case against Coinbase. "It's time for the Commission to rectify its approach and develop crypto policy in a more transparent manner. The Crypto Task Force is designed to do just that."

A slew of other crypto-related firms, including Ripple , Robinhood , Gemini , Uniswap Labs and Immutable , have announced similar agreements with the SEC in recent weeks, the latest being Crypto.com , which said the agency had ended its investigation into the crypto exchange on Thursday with no plan to pursue charges.

However, these firms are still awaiting official confirmation of their cases being dropped by the SEC.