South Carolina has dropped a lawsuit against cryptocurrency exchange Coinbase, which accused it of offering unregistered securities.
The South Carolina Attorney General’s securities division dismissed the case in a joint agreement with Coinbase, marking another win for the exchange after a similar case was dropped by Vermont earlier this month, according to the exchange’s chief legal officer, Paul Grewal.
“The dominoes keep falling […] 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 left that restrict staking,” he wrote in a Mar. 27 X post.
South Carolina was one of ten states that took action against Coinbase in June 2023, over its staking rewards program. The coordinated enforcement effort included states like California, New Jersey, and Illinois, following a multistate investigation supported by the U.S. Securities and Exchange Commission.
The states claimed that Coinbase’s staking service amounted to selling unregistered securities since users deposited crypto assets to validate blockchain transactions and received rewards in return, with Coinbase taking a cut.
Each state issued cease-and-desist orders and argued that the program needed to be registered or meet exemption rules under their securities laws.
On the same day, the SEC filed a complaint claiming that Coinbase had been running its platform in the U.S. without registering as a broker, national securities exchange, or clearing agency since 2019.
However, with the SEC dropping its case in February 2025, momentum has shifted.
According to Grewal, South Carolina residents lost an estimated $2 million in staking rewards as a result of the restrictions and urged the remaining states to reconsider their positions.
The other eight states involved in similar enforcement actions include Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin.
Grewal also confirmed that staking was live again in South Carolina across all access points, including the Coinbase app and website.
In the meantime, Coinbase has continued its expansion efforts, recently hinting at a potential acquisition of crypto exchange Deribit. The exchange is also preparing to re-enter the Indian market after receiving approval from the country’s Financial Intelligence Unit.
