United States’ South Carolina has dropped its lawsuit against Coinbase, allowing the crypto exchange to resume its staking services in the state. The decision is a victory for Coinbase and its users, and its Chief Legal Officer, Paul Grewal, celebrated the development.
Grewal Reacts to Lawsuit Dismissal
Grewal shared the news on X (formerly Twitter), stating, “The dominoes keep falling. South Carolina just joined Vermont to dismiss its unfounded staking lawsuit against Coinbase. Staking will very soon be back for Coinbase users in South Carolina.”
The lawsuit was part of an organized effort launched in June 2023 by ten U.S. states, including South Carolina, California, New Jersey, and Illinois. These states alleged that Coinbase’s staking services constituted the sale of unregistered securities. As an enforcement action, the authorities issued cease-and-desist orders that prevented residents from participating.
According to Grewal, South Carolina’s restrictions led to an estimated $2 million loss in staking rewards for local users. He further emphasized the broader impact on other crypto holders in the U.S., stating, “The 52 million Americans who own crypto deserve commonsense consumer protections and clear rules.”
He also appreciated South Carolina Attorney General Alan Wilson’s role in resolving the case.
“We applaud South Carolina for standing up for justice and hope the remaining states with bans on staking will take notice,” Grewal added.
Interestingly, In response to the lawsuit dismissal, the exchange has resumed staking services in South Carolina across all access points, including its website and mobile app.
Coinbase Legal Woes
Coinbase has been involved in multiple legal proceedings. The U.S. Securities and Exchange Commission (SEC) recently dismissed the civil enforcement action against the American exchange. The regulators cited forming a Crypto Task Force to develop a comprehensive regulatory framework for crypto assets.
However, the exchange is still fighting other lawsuits. BiT Global has initiated a $1 billion lawsuit against Coinbase, accusing the crypto exchange of improperly delisting wrapped Bitcoin (WBTC) from its trading platform. The asset custody firm claims the exchange’s action resulted in significant financial harm and operational disruption.
Meanwhile, Coinbase executives are dealing with a lawsuit by a shareholder over claims that they misled investors about the company’s financial risks and engaged in secret trading. Coinbase denied these allegations, claiming its business practices comply with applicable laws and that the accusations are based on a misunderstanding of the firm’s operational framework.
