Crypto.com (Foris DAX Inc.) Voluntarily Withdraws the Lawsuit Against SEC
Crypto.com Ends Legal Challenge Amid Gary Gensler's Resignation and CEO's Meeting with President-Elect Donald Trump
Crypto.com (Foris DAX Inc.) has voluntarily withdrawn its lawsuit against the U.S. Securities and Exchange Commission (SEC), signaling a shift in the ongoing battle between the crypto industry and regulators. The decision comes amid significant political changes, most notably the announcement that Gary Gensler, the SEC chairman, will step down on January 20, 2025, coinciding with the inauguration of President-elect Donald Trump. Adding to the intrigue, Crypto.com CEO Kris Marszalek recently met with Trump, hinting at the possibility of a new regulatory era for the cryptocurrency sector.
Background on the Lawsuit
In October 2024, Foris DAX Inc., a subsidiary of Crypto.com, initiated a lawsuit against the U.S. Securities and Exchange Commission (SEC), challenging what it described as "regulatory overreach" in crypto enforcement actions. The lawsuit was seen as a bold effort to push for clearer guidelines in the crypto derivatives space and reduce the SEC’s aggressive enforcement stance.
The SEC, led by Chairman Gary Gensler, had taken legal action against numerous crypto firms, prompting backlash from the industry. Gensler’s term was supposed to last until 2026, but following President-elect Donald Trump’s victory, he announced he would resign on January 20, 2025, the day of Trump's inauguration.
Strategic Timing and Political Influence
The decision to withdraw the lawsuit comes shortly after Kris Marszalek, CEO of Crypto.com, met with President-elect Donald Trump. This meeting indicates that Crypto.com may be positioning itself to align with the incoming administration's more crypto-friendly policies.
Trump has pledged to make the U.S. "the crypto capital of the planet" and previously announced intentions to fire Gary Gensler on "day one" of his presidency. Gensler, who has described the crypto industry as "rife with fraud," has been a controversial figure, with many in the crypto community celebrating his imminent departure.
Crypto Market and Regulatory Expectations
Since Trump’s election win, cryptocurrencies have surged, with Bitcoin hitting an all-time high of $106,000. Investors anticipate that Trump’s administration will relax enforcement and adopt a more favorable regulatory approach compared to the stringent policies under the Biden administration.
Court Filing Details
According to court documents filed on December 16, 2024, Foris DAX Inc. submitted a Notice of Voluntary Dismissal. The filing did not elaborate on the reasons, but the timing—coinciding with Gensler's resignation announcement and Marszalek’s meeting with Trump—suggests strategic recalibration.
Implications for the Crypto Industry
The lawsuit's withdrawal represents a significant shift for Crypto.com and the broader industry. With Gary Gensler stepping down and the prospect of a less hostile regulatory environment under Trump, crypto firms may find new opportunities for growth and innovation.
Looking Ahead
As the U.S. prepares for a Trump presidency, the crypto industry is poised for potential deregulation and a more collaborative relationship with regulators. Crypto.com’s strategic withdrawal of its lawsuit may pave the way for new dialogues and policies that favor innovation and investment.
Crypto.com has yet to release an official statement detailing its next steps.
Source: PacerMonitor Case# 6:24-cv-00373
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