The U.S. Securities and Exchange Commission (SEC) has initiated the process of withdrawing the lawsuit filed against Coinbase. Contingent on the approval of the commission members, this step is seen as a significant legal victory in the crypto sector. The SEC is preparing to withdraw the lawsuit against the cryptocurrency exchange Coinbase. The decision pending approval from commission members is being viewed as a major legal triumph within the crypto industry. By completely dropping the accusations asserting that Coinbase ran an unregistered exchange and listed unregistered securities, not only is this a win for Coinbase, but it also sets a precedent for other companies grappling with similar lawsuits in the sector. This development is expected to transition discussions around regulating cryptocurrencies in the U.S. from the courts to Congress. Paul Grewal, Chief Legal Officer of Coinbase, stated that the agreement with the SEC includes the dismissal of the lawsuit with “prejudice.” Grewal emphasized that this decision is not just a victory for Coinbase, but for the entire crypto ecosystem in the U.S. In an interview with CoinDesk, Grewal used the terms “We won, they lost” to underscore the significant impact of the SEC’s reversal on the sector. Coinbase CEO Brian Armstrong also described the development as a turning point for the industry. In a video released on Friday, Armstrong indicated that the SEC’s decision to withdraw sends a strong signal about how the regulatory environment will shape up in the future. The Changing View of the SEC on Crypto Withdrawing the Coinbase lawsuit is seen as a sign of a fundamental shift in the SEC’s approach to crypto assets. The SEC has long considered cryptocurrencies as securities, defending this stance within the framework of the Howey test. However, Coinbase chose to argue that the Howey test cannot be applied to crypto assets, opting to fight this out in federal courts. Ultimately, a judge granting Coinbase the opportunity to present these claims weakened the SEC’s position. The former head of the regulatory body, Gary Gensler, argued that most crypto assets are securities. Nevertheless, the recent step back in the Coinbase lawsuit signals that the ultimate decider on this matter will be Congress and not the courts. Following this development, the expectation is for the crypto sector to focus more on lobbying efforts rather than legal battles. Coinbase aims to create a friendlier regulatory framework in Congress by making millions of dollars in political contributions through Fairshake PAC. Signs of Division within the SEC The decision-making process within the SEC is thought to be influenced by internal disagreements at the institution. The commission members, Acting Chair Mark Uyeda, Republican Commissioner Hester Peirce, and Democratic Commissioner Caroline Crenshaw, hold different positions. While Peirce and Uyeda have been critical of the SEC’s approach to the crypto sector for a long time, Crenshaw has displayed a more skeptical attitude towards the digital asset industry. As uncertainty remains about Crenshaw’s stance towards dropping the lawsuit, it appears that the SEC is restructuring its enforcement unit concerning crypto matters. The agency aims to move past the period of intense focus on cases involving digital assets and instead concentrate more on investor protection and tackling fraud. A New Era in the Crypto World Analysts believe that the SEC’s retreat in the Coinbase lawsuit could set a precedent for other major crypto platforms like Binance. The regulatory body recently asked for a pause in the case against Binance. Furthermore, the SEC has stepped back from broader efforts to introduce regulatory definitions for crypto activities. These developments have generated expectations that the regulatory uncertainties the crypto market has long faced could diminish. However, this decision by the SEC does not mean that the regulatory framework will be completely relaxed. The agency emphasizes that it will maintain a strict stance, particularly on investor protection and fighting fraud. On the other hand, Dennis Kelleher, CEO of Better Markets, characterized the SEC’s retreat as a “historic mistake,” alleging that the agency is acting under the influence of billionaire crypto investors rather than enforcing laws impartially. In the coming days, the upcoming vote within the SEC on the Coinbase case and the court’s ruling will be closely monitored. If the SEC formally drops the allegations of Coinbase listing unregistered securities, it will have to follow the same path in similar cases. Paul Grewal expressed hope, saying, “I hope the dismissal of this case will serve as a template for resolving other cases,” underscoring that the priority for Coinbase and the crypto sector in the future is to establish clear regulations in the U.S. FTX Creditors Prepare to Reinvest in Crypto, Majority Plans to Purchase Solana CoinDesk: Despite the collapse of FTX, the majority of the creditors plan to continue investing in cryptocurrencies. The survey results conducted through NFTevening’s partnership with Storible show that there is a strong interest, particularly in Solana and AI-based projects. A significant portion of FTX creditors are looking to enter the financial recovery phase following the exchange’s collapse in 2022. According to the survey results, nearly 80% of the creditors are considering reinvesting their repayments into cryptocurrencies despite FTX’s approximately $9 billion collapse. This development demonstrates that optimism remains alive in the crypto world. The outcomes of the survey conducted on February 19th through NFTevening’s collaboration with Storible indicate that a large portion of FTX creditors maintain their interest in Solana (SOL) and AI-based projects in their investment preferences. Solana Remains Popular Among FTX Creditors The survey, conducted through the online research platform Prolific, involved 1,016 FTX creditors. Participants had to meet a criterion requiring their portfolios to consist of at least 10% in Solana (SOL) or holding a minimum of $100 worth of SOL for over a year. 62% of the respondents expressed their intent to buy Solana again despite adverse events in the past. Key incidents such as the launch of the Libra meme coin and the Meteora scandal impacted Solana’s value, but creditors have not lost hope in Solana’s future. According to the survey, 44% of the creditors indicated their intention to reinvest in Solana-based projects. If the price of Solana falls below $145, 71% of the participants plan to acquire more SOL or hold their existing holdings based on their strong belief in the company’s long-term growth potential. This outcome illustrates creditors’ commitment to building their assets at lower prices, viewing the drop as an opportunity. Ethereum and BNB Blockchains Take the Lead Following Solana, Ethereum (ETH) emerged as the second most preferred blockchain. While 31% of the participants plan to invest in Ethereum, 16% opt for investments in the BNB Chain (BNB). These results reveal that FTX creditors express interest not only in Solana but also in major ecosystems like Ethereum and BNB Chain. Meme Coins Retain Popularity Among FTX Creditors Meme coins continue to be popular among FTX creditors. The survey results show that one-third of the participants plan to invest in meme coins, considered speculative assets. Moreover, there has been a rise in interest in AI-based projects. 31% of the participants indicated that they are contemplating emphasizing AI-supported blockchain projects. This trend demonstrates the heightened belief in the financial sector’s and digital assets’ reliance on artificial intelligence. The Impacts of FTX’s Collapse and Recovery Process The collapse of FTX and over 130 subsidiaries in November 2022 left a deep mark on the crypto market, causing Bitcoin’s price to drop to around $16,000. Solana experienced a 94% decline, plummeting to $9.60 in December 2022. FTX’s collapse resulted in an extended crypto winter in the industry. Nonetheless, ongoing steps to recover in the sector continue. FTX’s Bahamas division conducted the initial repayment distribution to creditors on February 18th. Creditors with claims under $50,000 received approximately $1.2 billion in capital. The second repayment distribution is scheduled for May 30th and will involve a broader group of creditors. Future Expectations of FTX Creditors According to FTX’s recovery plan, creditors are expected to receive 98% of their claims in cash and 118% of the claim value. It is anticipated that by May 2024, the exchange will carry out a distribution ranging from $14.5 billion to $16.3 billion in total. These developments could help investors regain confidence in cryptocurrencies following FTX’s collapse and boost optimism in the sector once again.