- South Carolina dropped its Coinbase lawsuit on March 27, following Vermont’s earlier dismissal.
- Coinbase’s Paul Grewal says SC investors lost around $2 million in staking rewards.
- SEC dropped its lawsuit on February 27, signaling a shift in crypto regulation stance.
South Carolina has officially dropped its lawsuit against Coinbase, marking another win for the crypto exchange in its ongoing legal battles over staking services. The lawsuit, initially filed on June 6, 2023, accused Coinbase of offering unregistered securities through its staking program.
A joint stipulation between the crypto exchange and the South Carolina Attorney General’s securities division led to the lawsuit’s dismissal on March 27. This follows a similar decision from Vermont, making South Carolina the second state to back down.
Paul Grewal, Coinbase’s Chief Legal Officer, expressed his satisfaction, stating, “South Carolina just joined Vermont to dismiss its unfounded staking lawsuit against Coinbase.” He called this a victory not just for the company but for American consumers, hoping that other states still restricting staking would reconsider.
Grewal also acknowledged the role of the South Carolina Attorney General in resolving the issue, saying, “We appreciate the work of Attorney General to get this issue resolved for SC consumers.”
Investors Lose Millions Amid Lawsuit
The impact of the lawsuit was significant. Grewal noted that South Carolina residents missed out on roughly $2 million in staking rewards due to the legal action. He pointed out that crypto investors across the U.S. deserve “commonsense consumer protections and clear rules.”
South Carolina and Vermont were among the ten states that took legal action against Coinbase’s staking services. The other eight states—Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin—have yet to follow suit. Grewal remains hopeful that they will, stating, “We applaud South Carolina for standing up for justice and hope the remaining states with bans on staking will take notice.”
This wave of dismissals comes after the Securities and Exchange Commission (SEC) officially dropped its own lawsuit against Coinbase on February 27, 2025. The agency stated that the move would help in its efforts to reform crypto regulations, signaling a possible shift in its stance on digital assets.
Coinbase Pushes for Clear Crypto Regulations
While Coinbase is winning legal battles, it continues to advocate for clear and fair regulations in the crypto space. Paul Grewal recently voiced strong support for Paul Atkins, who has been nominated as the next SEC Chairman. During a Senate Banking Committee hearing, Grewal emphasized the need for a transparent regulatory framework under Atkins’ leadership.
“Getting workable rules and regulatory clarity for crypto will unlock US-based innovation,” Grewal commented. He believes that well-defined regulations could drive new markets, protect consumers, and strengthen the U.S.’s position in financial technology.
Mr. Atkins emphasized that digital assets are a top priority this year. Getting workable rules and regulatory clarity for crypto will unlock US-based innovation, new markets for investors, and benefit American consumers and America’s position as a global technological and…
— paulgrewal.eth (@iampaulgrewal) March 27, 2025
Atkins criticized the current regulatory landscape, calling it “unclear, overly politicized, complicated and burdensome.” He argued that these issues are stifling capital formation and preventing innovation in digital assets.
Atkins and Comptroller of the Currency nominee Jonathan Gould pledged to end “debanking,” calling it undemocratic. Grewal reinforced this sentiment, stating, “It’s time for the SEC to get back to basics.”
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