The U.S. Securities and Exchange Commission on Thursday filed to dismiss its lawsuit against Coinbase, the largest U.S. cryptocurrency exchange, putting an end to a legal battle as the regulator moves to change course under President Donald Trump.

Coinbase debuted its stock on the Nasdaq in April 2021 after the SEC reviewed the crypto exchange's business model and S1 disclosures and allowed the company to go public. However, Coinbase said that changed two years later, when the SEC sued the company "despite absolutely nothing" changing in its business model.

Coinbase is in the clear after the SEC followed through on its agreement and voluntarily dismissed its case against the crypto exchange.

According to Coinbase chief legal officer Paul Grewal, the US Securities and Exchange Commission (SEC) plans to drop its lawsuit against the largest US cryptocurrency exchange, as the agency shifts to embrace Donald Trump's new approach to regulating cryptocurrency in the US.

The end of a court fight with the largest U.S. crypto company would be a big win for an industry that financially backed President Trump.

Coinbase said on Friday the U.S. securities regulator planned to withdraw its lawsuit against the crypto exchange, ending a contentious years-long legal battle once considered existential for the trading platform and the broader sector.

Regulators have agreed to drop a lawsuit against Coinbase that sought to regulate the company as a stock exchange, marking the end of years of hard-line enforcement against the crypto market. Coinbase said Friday that enforcers at the Securities and Exchange Commission would recommend dismissal of the two-year-old lawsuit,

The battle may be around setting rules for exchanges and establishing when tokens should be treated as securities or as commodities.