- South Carolina’s decision to dismiss the stalking lawsuit against Coinbase sets a positive precedent for crypto services in the state.
- The dismissal of lawsuits by South Carolina and Vermont reflects a push for more consistent and transparent crypto regulations.
- South Carolina’s new digital asset investment plan shows how states are embracing crypto while prioritizing security and compliance.
South Carolina has officially dismissed its lawsuit against Coinbase regarding its staking services, joining Vermont in a move that the crypto exchange has described as a significant victory for American consumers. This legal decision, announced on March 27, 2025, marks a positive development for Coinbase users in the state, who will soon regain access to staking services.
Implications of the Staking Lawsuit Dismissal
According to Coinbase’s Chief Legal Officer, Paul Grewal, the dismissal has been shared in a post on X, where he emphasized the impact of the case on South Carolina residents, who lost an estimated $2 million in staking rewards. Grewal expressed optimism that other states would follow suit, advocating for clear regulations and consumer protections for the 52 million Americans who own cryptocurrency.
The action has also been filed on June 6, 2023, as a joint enforcement action by a group of ten U.S. states, consisting of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin, together with South Carolina and Vermont. The Securities and Exchange Commission has also filed a federal action against Coinbase on the same date.
The recent decision by Vermont and South Carolina to drop their lawsuits has been considered a big step towards the establishment of a regulatory environment for staking digital assets.. The dismissals come at a time when there is mounting pressure from state and federal regulators to determine the legal status of staking services and digital assets.
South Carolina Strategic Digital Assets Reserve Act
On March 27, 2025, the State of South Carolina brought forth the Strategic Digital Assets Reserve Act that allows the State Treasurer to invest up to 10% of certain state funds in digital assets such as Bitcoin. The bill aims to protect state financial assets from economic uncertainty and inflation by diversifying the portfolio of the state.
The bill has also made strict requirements, requiring digital assets to be held in safe custody arrangements or exchange-traded products. It demands independent audits, cold storage practices, and biennial reporting of digital asset holdings. The action reflects a trend in which states aim to harness the benefits of digital assets while maintaining regulatory compliance and protection of assets.
