South Carolina has dropped a lawsuit against cryptocurrency exchange Coinbase, which accused it of offering unregistered securities.
Earlier this month, Vermont dropped a prosecution that was very similar to the one that Coinbase was involved in. According to Paul Grewal, the chief legal officer of the exchange, the securities section of the South Carolina Attorney General dismissed the case in a mutual agreement with Coinbase.
This victory is another triumph for the exchange!”The dominoes are still falling out . This is not only a success for us, but also for American consumers, and we hope that it is a sign of things to come in the few areas that still ban staking,” he wrote in a post on March 27 on X.
Regarding the staking incentives scheme that Coinbase offered, South Carolina was one of the ten states that launched legal action against the company in June of 2023.
Following a multistate investigation that was supported by the United States Securities and Exchange Commission, the coordinated enforcement effort included states such as California, New Jersey, and Illinois.
Users deposited crypto assets to authenticate blockchain transactions and got incentives in exchange, with Coinbase getting a part of the rewards. The states alleged that Coinbase’s staking business constituted selling unregistered securities because of this.
The program was ordered to stop by each state, and the states contended that it was necessary for the program to be registered or to comply with exemption requirements under their respective securities laws.
On the same day, the Securities and Exchange Commission (SEC) filed a complaint alleging that Coinbase has been operating its platform in the United States without registering as a broker, national securities exchange, or clearing agency since the year 2019.
On the other hand, the impetus has shifted as a result of the SEC withdrawing its case in February of 2025. Grewal asserts that people of South Carolina lost an estimated two million dollars in staking awards as a direct result of the restrictions, and he urges the other states to reevaluate their views within the state.
Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin are the other eight states that are participating in similarly comparable enforcement operations.
Furthermore, Grewal verified that the staking feature was operational once more in South Carolina across all access points, which included the Coinbase website and mobile application.
While everything is going on, Coinbase has continued its efforts to expand, and they have lately dropped hints about the possibility of acquiring the cryptocurrency exchange Deribit.
According to the Financial Intelligence Unit of India, the exchange is also making preparations to re-enter the Indian market after gaining approval from the Indian government.
