TLDR
- Aligning with Vermont, South Carolina has decided to drop its staking services lawsuit against Coinbase.
- There remain eight other states, including giants like California and Illinois, where similar legal battles with Coinbase are still unfolding.
- Paul Grewal, Coinbase’s Chief Legal Officer, points out that South Carolina residents missed out on $2 million worth of staking rewards owing to imposed restrictions.
- South Carolina has introduced a groundbreaking bill that could see up to 10% of certain state funds being diverted to Bitcoin investments.
- The proposed Strategic Digital Assets Reserve Act aims to establish a Bitcoin repository of up to 1 million coins.
In a significant legal development, South Carolina decided to cease its legal proceedings against Coinbase over staking services. This cooperative decision, finalized on March 27, 2025, came after Vermont took a similar step earlier in the same month.
This lawsuit was part of a broader initiative set by ten states initially in June 2023, challenging Coinbase's crypto staking offerings as unregistered securities.
Coinbase’s legal head, Paul Grewal, expressed his satisfaction on social media, highlighting this as a win not just for the company but also for consumers across America.
Grewal also revealed that the staking services, which had been previously stopped, have now resumed in South Carolina for all Coinbase users.
The collective actions align with a major lawsuit from the Securities and Exchange Commission that was retracted in February 2025, hinting at a possible policy recalibration regarding crypto staking.
Among the eight states still engaging in similar lawsuits are names like Alabama, California, and Illinois, all demanding Coinbase’s staking services be recognized under their securities frameworks.
Claims in the lawsuits indicate that Coinbase's staking services are akin to unregistered securities due to the structure of staking rewards and the fees involved.
Grewal emphasized the necessity for straightforward consumer protections and regulatory clarity in crypto, congratulating South Carolina on their step forward.
What Lies Ahead for Cryptocurrency in South Carolina
Parallel to the lawsuit resolution, South Carolina is showing interest in digital currency adoption, marked by a new bill proposal on the same day.
There is a sense of pride in moving forward with legislation that positions South Carolina to strategically incorporate cryptocurrencies at the state level, offering new fiscal tools. @realDonaldTrump The bill, if passed, would enable the state treasurer to allocate portions of state funds into digital currencies, stressing Bitcoin's importance. https://t.co/JqUuBw243D
— Jordan Pace (@Jscottpace) March 27, 2025
South Carolina’s Treasurer could soon be responsible for managing a substantial Bitcoin reserve with a threshold of 1 million BTC, similar to federal initiatives.
Various state funds, such as the General Fund, could soon benefit from Bitcoin investments under new management rules by the Treasurer's Office.
Although Bitcoin is a key focus, there's room for other digital assets, although the bill notably omits specific mention of options like stablecoins or NFTs.
This legislative stride places South Carolina at the forefront of a national trend, with 42 state-level Bitcoin reserve proposals surfacing across 19 states.
Further indicating federal interest, President Trump's recent executive order opened doors for national Bitcoin reserves, relying initially on assets seized in criminal cases.
The dual announcement of lawsuit dismissal and the Bitcoin bill reflects a potential pivot in South Carolina’s stance, inching closer to crypto acceptance. Bitcoin Persisting in its expansion mission, Coinbase looks beyond existing regulatory challenges, considering strategic acquisitions such as Deribit, and returning to markets like India.
Across the United States, the reevaluation of crypto regulations continues, with South Carolina setting a possible example of harmonizing strict regulations with tech progression. a Bitcoin Maisie is a seasoned reporter specializing in Crypto and Finance, having contributed to outlets like Moneycheck, Blockonomi, and presently as Editor-in-Chief at Blockfresh.
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