SEC Drops Lawsuits Against Kraken, Consensys, and Cumberland

The United States Securities and Exchange Commission (SEC) has officially announced the dismissal of lawsuits against prominent crypto companies like ConsenSys, Kraken, and Cumberland. 

The judgments, filed on Thursday with prejudice, make it impossible to reopen these cases, effectively clearing these companies of allegations brought against them. In a related action, the regulator officially dropped its case against Crypto.com. While this action marks a significant milestone for these companies, the SEC noted that this dismissal does not signal any change in its position regarding other pending enforcement actions within the industry.

Broader Regulatory Turn

Each of the crypto-centric companies had been charged with high-profile enforcement actions. In November 2023, the agency accused Kraken of operating an unregistered securities exchange, broker, dealer, and clearing agency. Consensys faced similar claims in June 2024 when the SEC charged the firm of unlawfully offering securities through its MetaMask Staking service. 

Cumberland DRW, a Chicago-based trading firm, was sued in October 2024 for allegedly acting as an unregistered dealer handling over $2 billion in crypto assets.

Reacting to the development, Kraken said that the SEC’s recent move marks the end of a “wasteful, politically motivated campaign.” The exchange added that the ruling eliminates the uncertainty that might have choked innovation and investment in the industry.

SEC Ends Investigation Into Crypto.com

In a press release yesterday, Crypto.com disclosed that the SEC had closed its investigation and that no enforcement action would be filed against the exchange. The former SEC administration issued a Wells Notice to the crypto exchange last October. 

The crypto market has seen a broader shift in SEC enforcement under Acting Chair Mark Uyeda. Since stepping into the role in January, Uyeda has overseen the dismissal of several high-profile investigations against several crypto companies, including  Uniswap Labs, Robinhood, OpenSea, Coinbase, and Yuga Labs. This development signals a departure from the aggressive approach seen during Gary Gensler’s tenure.

The SEC’s rulings could likely be a step in the direction of a more collaborative regulatory landscape, one that can open the door to more constructive dialogue between regulators and industry leaders. This might ultimately shape policies that accommodate both compliance needs and technological advancements.