South Carolina Drops Coinbase Staking Lawsuit After Vermont’s Earlier Dismissal

Highlights:

• South Carolina has dropped its staking lawsuit against Coinbase.
• The state became the second region after Vermont to dismiss a similar court case.
• Coinbase’s CLO said the exchange had resumed staking services for South Carolinians.

South Carolina became the latest US state to drop its staking lawsuit against the largest American crypto exchange, Coinbase. The trading platform’s Chief Legal Officer (CLO), Paul Grewal, announced via a tweet on March 27. The case dismissal comes a few days after Vermont filed to end a similar lawsuit against Coinbase.

In his X post, Grewal noted that South Carolina Coinbase users would soon regain access to staking services on the exchange’s platform. In a follow-up tweet, the CLO said the Staking services have gone live across all entry points in the state. “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,” the CLO added.

The dominoes keep falling. South Carolina just joined Vermont to dismiss its unfounded staking lawsuit against @Coinbase. Staking will very soon be back for Coinbase users in South Carolina. This is not just a victory for us, but for American consumers and we hope it's a sign of…

— paulgrewal.eth (@iampaulgrewal) March 27, 2025

South Carolina Coinbase Users Forfeited Significant Funds Because of the Lawsuit

According to Grewal, South Carolinians lost approximately $2 million in staking rewards because of the lawsuit. He also emphasized the need for clear crypto regulations and consumer protections for the 52 million Americans who own cryptocurrencies.

The CLO praised South Carolina for standing up for justice. He urged other states that filed similar lawsuits against the exchange to reconsider their stance. Grewal also appreciated Alan Wilson, South Carolina’s Attorney General, for resolving the case fairly.

South Carolinians lost an estimated $2 million in staking rewards due to this case. The 52 million Americans who own crypto deserve commonsense consumer protections and clear rules. We applaud South Carolina for standing up for justice and hope the remaining states with bans on…

— paulgrewal.eth (@iampaulgrewal) March 27, 2025

Case Dismissal Details

South Carolina and Coinbase mutually agreed to terminate the lawsuit, voiding an initial cease-and-desist order against the exchange in June 2023.

The dismissal was with no admission of guilt. However, it does not mean that South Carolina securities regulators declared Coinbase free of all allegations, as the regulators could decide to pursue a similar case in the future. Also, the agreement to end the legal battle will not attract any fine or penalty for both parties.

Coinbase Enjoys Growing Number of Lawsuit Dismissals

The SEC and ten other US states sued Coinbase within the same period. They include California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Alabama, Washington, Vermont, and Wisconsin.

In a March 13 court order, Vermont announced its intention to withdraw its show cause order against Coinbase. The case dismissal was also mutual without prejudice, allowing the state to reopen the case if necessary. In addition, the court order stipulated that each side shall bear its legal costs, implying that neither party is responsible for the other’s expenses.

In February, Coinbase announced that the SEC agreed to end the lawsuit against it. The SEC filed a lawsuit against the trading platform in 2023, alleging that it aided in transacting assets, which the SEC deemed as securities.

The court case termination from the SEC came amid several similar dismissals involving companies like Robinhood, Gemini, Cumberland DRW, Uniswap Labs, etc. The United States, under Trump’s administration, has launched a crypto regulatory landscape restructuring to encourage crypto participation among Americans.

Aside from the US, Coinbase has earned regulatory approvals in other regions. In a previous publication, Crypto2Community reported that the American exchange has secured a VASP license from the UK’s Financial Conduct Authority (FCA). The approval allows Coinbase to offer crypto and fiat services to UK customers, making it the largest regulated exchange in the country.

In other related news, Coinbase has registered with India’s Financial Intelligence Unit (FIU). The registration marked a crucial step in Coinbase’s global expansion efforts. According to the report, the exchange could soon start providing crypto services to Indian users once the regulators approve its registration.