Alabama has dropped its enforcement action against Coinbase’s staking program, easing regulatory pressure on the crypto giant. This move signals a growing acceptance of crypto staking, potentially reshaping the industry’s future in the state.
A Major Win
Alabama’s Securities Commission withdrew its case against Coinbase, stating that a cease-and-desist order over the exchange’s staking services was unwarranted. The decision, filed on Wednesday, was shared via court documents.
In June 2023, Alabama joined nine other states in alleging that Coinbase’s staking program, which lets users earn rewards by locking up crypto assets, violated securities laws by offering unregistered securities. The state’s reversal follows a broader trend, as the U.S. Securities and Exchange Commission (SEC) dismissed its lawsuit against the company in February 2025.
Coinbase’s Chief Legal Officer, Paul Grewal, celebrated the move with a post on X, noting that Alabama’s decision halves the number of states with active staking suits against the company in just two months.
We’re halfway there: Alabama just dropped its enforcement action against @coinbase – cutting the number of states with misguided staking suits in half in just two months. 1/3 pic.twitter.com/MWVnl30BTl
— paulgrewal.eth (@iampaulgrewal) April 23, 2025
Coinbase Recounts Victories
Alabama’s retreat could boost Coinbase’s staking services, which manage over 3.84 million ETH across 120,000 validators. The decision may encourage other states, like California and New Jersey, to reconsider their pending cases, encouraging a more crypto-friendly regulatory landscape. However, some critics argue that dismissing such cases risks weakening investor protections.
This follows a wave of regulatory shifts. Over the past few months, Vermont, South Carolina, and Kentucky dropped similar suits in March and April 2025, while Illinois followed on April 4. These pullbacks align with the SEC’s formation of a Crypto Task Force in January 2025 to develop clearer crypto rules.
Meanwhile, Coinbase’s political efforts through the Fairshake PAC, which donated millions to pro-crypto campaigns, may have influenced this trend. As crypto gains traction, evidenced by ARK Invest’s recent ETF share purchases, Alabama’s decision highlights the industry’s growing influence. However, it raises questions about balancing innovation with oversight in a rapidly growing market.
