Coinbase has been cleared in South Carolina after the state dropped its lawsuit against the cryptocurrency exchange.
The lawsuit, initiated by the South Carolina Attorney General’s securities division, accused Coinbase of offering unregistered securities.
South Carolina dismissed the case in a joint agreement with Coinbase. Similar Case Dropped by Vermont: This development follows a similar case being dropped by Vermont earlier in March 2025.
Coinbase’s chief legal officer, Paul Grewal, described this as “another win for the exchange” and stated that “the dominoes keep falling”. He views this as a victory for American consumers and hopes it signals a change in other states that still restrict staking.
South Carolina was one of ten states that took action against Coinbase in June 2023 over its staking rewards program. This coordinated effort involved states like California, New Jersey, and Illinois and followed a multistate investigation supported by the U.S. Securities and Exchange Commission.
The states argued that Coinbase’s staking service constituted selling unregistered securities because users deposited crypto assets for blockchain transaction validation and received rewards, with Coinbase taking a cut. Each state-issued cease-and-desist order contended that the program must be registered or meet exemption rules under their securities laws.
According to Paul Grewal, South Carolina residents lost an estimated $2 million in staking rewards due to these restrictions.
The SEC also filed a complaint against Coinbase on the same day in June 2023, alleging that it had been operating its platform in the U.S. without the necessary registrations since 2019. However, the SEC dropped its case in February 2025, which has shifted the momentum.
Following the dismissal, Paul Grewal confirmed that staking is once again live in South Carolina across all Coinbase access points, including the app and website.
The other eight states involved in similar enforcement actions are Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin. Grewal has urged these remaining states to reconsider their positions.
Coinbase has achieved a significant legal victory in South Carolina by dismissing the lawsuit concerning its staking rewards program. This follows a similar outcome in Vermont and coincides with the SEC dropping its case against Coinbase.
Coinbase views this as a positive development for the company and its users, particularly those in South Carolina who can now access staking services again. The focus now shifts to the remaining states that have taken similar actions against Coinbase’s staking program.
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