Coinbase

Overview

Coinbase is the largest cryptocurrency exchange in the United States, and its recent history reads as a single regulatory arc: it went public in April 2021 through a direct listing, was sued by the U.S. Securities and Exchange Commission in June 2023 for operating as an unregistered exchange, broker and clearing agency, and saw the case dismissed by joint stipulation in February 2025 — with the SEC going out of its way to say the dismissal reflected a change in regulatory approach, not a judgment on the merits of its claims (Reuters; SEC; SEC). Along the way the company also became a corporate-structure outlier: since February 2021 it has had no official physical headquarters, operating remote-first by design (Coinbase).

From Y Combinator to Nasdaq

Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam (Reuters). Armstrong, a former Airbnb software engineer frustrated by how slow and expensive it was to move money across borders, pitched his bitcoin wallet startup at a Y Combinator demo day that year; he co-founded the company with Ehrsam, and within nine months the pair had grown it to more than 100,000 users (UseTheBitcoin). Armstrong has remained chief executive continuously since the founding (UseTheBitcoin).

On April 14, 2021, Coinbase debuted on Nasdaq through a direct listing — no shares were sold ahead of the opening (Reuters). The stock opened at $381 per share, up 52.4% from the $250 reference price, and closed at $328.28, giving a fully diluted valuation of $85.78 billion and a market capitalization of $65.39 billion (Reuters). At the time the company reported 56 million users globally and an estimated $223 billion in assets on its platform, about 11.3% of crypto-asset market share (Reuters). Two months earlier, Armstrong had announced that Coinbase would stay remote-first permanently: “we no longer have a headquarters located in any one city,” he wrote, with about 95% of employees keeping the option to work from home, in an office, or a mix (Coinbase).

The SEC case, from charges to dismissal

On June 6, 2023, the SEC charged Coinbase with operating its crypto asset trading platform as an unregistered national securities exchange, broker and clearing agency, and with failing to register the offer and sale of its crypto staking-as-a-service program (SEC). According to the complaint, since at least 2019 Coinbase had “made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities,” intertwining the functions of exchange, broker and clearing agency without registering any of them (SEC). The case was filed in the U.S. District Court for the Southern District of New York as No. 1:23-cv-04738, and the SEC sought injunctive relief, disgorgement of ill-gotten gains plus interest, and penalties (SEC).

Coinbase moved to dismiss, arguing its transactions were not securities and fell outside the SEC’s purview — but on March 27, 2024, U.S. District Judge Katherine Failla denied the motion on the core claims, ruling that “the SEC has sufficiently pleaded that Coinbase operates as an exchange, as a broker, and as a clearing agency under the federal securities laws, and through its Staking Program engages in the unregistered offer and sale of securities” (CoinTelegraph). The suit had alleged that 13 listed tokens were securities (CoinTelegraph).

The case never reached trial. On February 27, 2025, the SEC announced it had filed a joint stipulation with Coinbase Inc. and Coinbase Global Inc. to dismiss the enforcement action (SEC). The agency tied the decision to the Crypto Task Force it had formed on January 21, 2025 to develop a clearer regulatory framework for crypto assets (SEC). Then-Acting Chairman Mark T. Uyeda said it was “time for the Commission to rectify its approach and develop crypto policy in a more transparent manner” (SEC). Crucially, the Commission stated that its decision rested on facilitating its regulatory reset “not on any assessment of the merits of the claims alleged in the action,” and that it did not reflect the Commission’s position on any other case (SEC).

What this profile does not claim

• The dismissal was a policy decision, not a court ruling that Coinbase’s tokens are not securities. The SEC explicitly said the dismissal was not on the merits, and a federal judge had earlier found the agency’s core claims sufficiently pleaded.
• This profile does not state whether the dismissal was with or without prejudice; the precise stipulation terms were not independently read (see openItems).
• It does not claim Coinbase has no offices — the company says it maintains offices for employees who prefer them; it claims no single location is designated as headquarters.
• “Largest US crypto exchange” reflects reporting at the times cited; market leadership is a moving measure.
• Armstrong’s net worth and shareholding figures move with the COIN share price and are not stated here.