South Carolina has decided to withdraw its lawsuit against the cryptocurrency platform Coinbase, which had charged the exchange with issuing unregistered securities.
The state’s Attorney General’s securities division dismissed the lawsuit in a mutual agreement with Coinbase, representing another positive outcome for the exchange following a similar case’s dismissal in Vermont earlier this month, as noted by Coinbase’s chief legal officer, Paul Grewal.
“The dominoes keep falling […] This isn’t just a win for us; it’s a win for American consumers, and we hope it signals a positive trend in the remaining states that still impose restrictions on staking,” he shared in a post on March 27 on X.
In June 2023, South Carolina was among ten states that pursued action against Coinbase concerning its staking rewards program. This unified enforcement initiative involved states such as California, New Jersey, and Illinois, stemming from a multistate investigation that was supported by the U.S. Securities and Exchange Commission.
The states contended that Coinbase’s staking service represented the sale of unregistered securities since users deposited cryptocurrency to validate blockchain transactions, receiving rewards in return, with Coinbase taking a portion of those rewards.
All states issued cease-and-desist orders, asserting that the program should either be registered or comply with exemption criteria under their respective securities regulations.
On the same day, the SEC filed a complaint alleging that Coinbase had operated its platform in the U.S. without registering as a broker, national securities exchange, or clearing agency since 2019.
However, following the SEC’s decision to drop its case in February 2025, the momentum appears to have shifted.
Grewal stated that residents of South Carolina faced an estimated loss of $2 million in staking rewards due to the restrictions and urged other states to reassess their positions.
The remaining eight states involved in similar enforcement actions include Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin.
Grewal also confirmed that staking services are once again available in South Carolina through all access points, including the Coinbase app and website.
Meanwhile, Coinbase continues its expansion, recently indicating a potential acquisition of the crypto exchange Deribit, and is also preparing to make a comeback in the Indian market after receiving approval from the nation’s Financial Intelligence Unit.