Key Takeaways:
- South Carolina dropped its staking lawsuit against Coinbase after Vermont, allowing users to resume staking services.
- The case dismissal, with no admission of wrongdoing, voids a prior cease-and-desist order.
- Coinbase continues securing regulatory approvals globally amid ongoing legal challenges in the U.S.
South Carolina has officially dropped its lawsuit against Coinbase over its staking services, making it the second state to do so after Vermont. The decision, announced on March 27 by Coinbase Chief Legal Officer Paul Grewal, follows Vermont’s dismissal of a similar case earlier this month.
Staking Services Resume in South Carolina
Grewal confirmed in a post on X that Coinbase users in South Carolina would soon regain access to staking services. In a follow-up update, he stated that staking services had already resumed across all platforms in the state.
Grewal noted:
This is not just a victory for us, but for American consumers, and we hope it’s a sign of things to come in the few states that restrict staking.”
Notably, the lawsuit’s dismissal comes as a relief to South Carolina Coinbase users, who, according to Grewal, lost approximately $2 million in staking rewards due to the legal battle. He also reiterated the importance of clear regulatory frameworks for the 52 million Americans who own cryptocurrencies.
Case Dismissal Terms
South Carolina and Coinbase mutually agreed to terminate the lawsuit without any admission of wrongdoing. Meanwhile, the agreement also voids a cease-and-desist order that was imposed on Coinbase in June 2023.
Although the case has been dismissed, it does not constitute a full exoneration of Coinbase. South Carolina’s regulators retain the right to revisit the issue and take legal action in the future if necessary.
With two states dropping their cases against Coinbase in quick succession, the outlook for staking services in the U.S. remains fluid. While some states continue to impose restrictions, the trend toward dismissals could indicate growing acceptance of staking as a legitimate financial service.
Broader Implications and Legal Landscape
The dismissal in South Carolina follows a similar move in Vermont, which announced on March 13 that it would withdraw its show cause order against Coinbase. Like South Carolina’s case, Vermont’s dismissal was mutual and made without prejudice.
Coinbase has faced legal challenges from multiple states as well as the US SEC. The SEC, along with regulatory bodies in ten states—including California, Illinois, Maryland, New Jersey, Alabama, Washington, and Wisconsin—filed lawsuits against Coinbase over its staking and trading operations.
In February, Coinbase disclosed that the SEC had agreed to drop its lawsuit against the exchange. These recent legal victories suggest a potential shift in how staking services are perceived by US authorities.
Outside the United States, Coinbase has made significant strides in securing regulatory approvals. It recently obtained a VASP license from the UK’s Financial Conduct Authority and has registered with India’s Financial Intelligence Unit, paving the way for operations in both regions.
