The SEC dropped its Coinbase lawsuit after Trump took office. Meanwhile, his family's crypto ventures have added over $1 billion to his net worth, raising conflict-of-interest concerns.
SEC Drops Coinbase Lawsuit as Trump's Crypto Wealth Grows
The Securities and Exchange Commission officially dismissed its enforcement case against Coinbase on February 27th, ending a nearly two-year legal battle that had become one of the agency's highest-profile crypto actions. The case, filed in June 2023 under former Chair Gary Gensler, accused Coinbase of operating as an unregistered broker, exchange, and clearing agency in violation of securities law. The dismissal was with prejudice, meaning the SEC cannot refile, and Coinbase faces no fines or penalties.
The decision came just over one month into President Trump's second term and marked a dramatic shift in the agency's approach to digital assets. Acting Chair Mark Uyeda, appointed by Trump after Gensler's resignation, announced the creation of a crypto task force to develop "sensible regulatory pathways" and renamed the enforcement unit to focus on fraud rather than registration violations. The SEC stated the dismissal would "facilitate efforts to reform and renew its regulatory approach," though it added this did not reflect any assessment of the case's merits.
Coinbase CEO Brian Armstrong praised the decision, calling it a major victory for the crypto industry. Armstrong had long argued that the SEC overstepped its authority by attempting to regulate digital assets without clear congressional guidance. The company spent heavily to influence the 2024 election, contributing $75 million to Fairshake, a pro-crypto super PAC, and donating $1 million to Trump's inauguration fund. Armstrong also met privately with Trump at Mar-a-Lago shortly after the election to discuss personnel appointments and policy priorities.
The timing has fueled criticism from watchdog groups and Democratic lawmakers who argue the dismissal reflects political corruption rather than legal merit. Public Citizen called it "proof positive that the crypto industry's flood of campaign spending has paid off," warning that abandoning basic regulatory authority invites a "corporate crime spree." Commissioner Caroline Crenshaw, the SEC's sole Democrat, dissented from the decision, arguing it undermines enforcement authority and creates legal uncertainty about which crypto assets are securities.
Meanwhile, Trump's personal involvement in the crypto industry has grown exponentially. His family launched World Liberty Financial in September 2024, a DeFi platform that raised over $550 million by selling WLFI governance tokens. Trump's company, DT Marks DEFI LLC, receives 75% of net proceeds from token sales. Financial disclosures show Trump earned $57.7 million from World Liberty in 2024 alone, and the family holds 22.5 billion WLFI tokens valued at roughly $5 billion when the token began trading in September 2025.
Trump also launched a $TRUMP memecoin in January 2025, which briefly surged to a multi-billion-dollar valuation before declining. In May, he hosted a private dinner for top memecoin holders, charging participants $140 million collectively to secure invitations—an arrangement ethics experts described as selling access to the president. Multiple reports estimate Trump's crypto ventures have added between $1 billion and $11.6 billion to his net worth, depending on token valuations and liquidity assumptions.
The broader regulatory rollback extends beyond Coinbase. The SEC paused litigation against Binance, dropped investigations into Ripple, Kraken, Gemini, Robinhood, and Uniswap, and closed an enforcement action against Justin Sun—a major World Liberty Financial investor who contributed $30 million shortly after Trump took office. A House Judiciary report released in November 2025 warned that Trump's crypto empire presents "severe constitutional, ethical, and national security concerns," citing investments from foreign state-linked entities and individuals under criminal investigation.
Whether this represents regulatory reform or regulatory capture depends largely on perspective. Industry advocates argue the Biden-era SEC stifled innovation through enforcement without rulemaking, creating legal uncertainty that pushed companies offshore. Critics counter that abandoning oversight invites fraud, market manipulation, and systemic risk—particularly when the president directly profits from reduced regulation of his own ventures.