Three years ago, in June 2023, Coinbase faced a significant lawsuit from the SEC that threatened its operational foundation. The SEC accused Coinbase of functioning as an unregistered national securities exchange, broker, and clearing agency, alongside criticisms of its staking offerings. Fast forward to the present, and Coinbase now finds itself in a much stronger position as a member of the S&P 500.
Coinbase officially joined the S&P 500 on May 19, 2025, following the announcement on May 12. It took the place of Discover Financial Services, which was being acquired by Capital One. This inclusion marks Coinbase as the first cryptocurrency-focused entity to be added to the S&P 500, a benchmark index that guides trillions in passive investments. Consequently, index funds, ETFs, and retirement accounts across the nation now hold shares of Coinbase, regardless of individual investment decisions.
The immediate impact of this announcement was notable, with COIN shares experiencing a surge of approximately 24% on the announcement day alone. In June 2025, Coinbase achieved the status of the top performer in the S&P 500, outperforming all other companies included in the index. The CEO emphasized that this milestone signifies the growing acceptance of digital assets in the mainstream investment landscape.
The lawsuit from the SEC had called into question the core business model of Coinbase. The agency claimed that Coinbase was operating outside the regulatory framework, functioning as an exchange, broker, and clearing agency without the necessary registrations. Additionally, the SEC scrutinized the company's staking-as-a-service offerings. After voluntarily dismissing the lawsuit in February 2025, Coinbase projected annual legal cost savings of over $50 million.
While Coinbase has stepped back from the lawsuit's shadow, it is not entirely free from regulatory scrutiny. Chief Legal Officer Paul Grewal has highlighted an ongoing SEC investigation, which he describes as a legacy concern rather than a distinct threat to the company's operations.