South Carolina’s legal battle with cryptocurrency exchange Coinbase over its staking services has come to a close with the state dropping its lawsuit. This decision marks a significant victory for Coinbase in its legal struggles across the United States.
The joint stipulation filed on March 27 between the South Carolina Attorney General’s securities division and Coinbase led to the dismissal of the case. The lawsuit had alleged that Coinbase was offering unregistered securities through its staking program. Originally filed on June 6, 2023, the lawsuit was part of a series of legal challenges faced by Coinbase, including a federal lawsuit by the U.S. Securities and Exchange Commission (SEC) which was dismissed in February 2025.
Coinbase’s Chief Legal Officer, Paul Grewal, praised the decision in a post on X, stating that South Carolina had joined Vermont in dismissing the “unfounded staking lawsuit against Coinbase.” Grewal emphasized that this victory not only benefits the company but also American crypto users. He expressed hope that other states would follow suit.
South Carolina was one of 10 states that had taken enforcement actions against Coinbase last June. While South Carolina has dropped the lawsuit, eight other states including Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin, have yet to do so. Grewal noted that as a result of the lawsuit, South Carolina residents had missed out on an estimated $2 million in staking rewards.
In a separate development, South Carolina has introduced progressive legislation in the crypto space. On the same day the lawsuit was dismissed, state lawmakers proposed the “Strategic Digital Assets Reserve Act of South Carolina.” This bill suggests allocating up to 10% of certain funds into cryptocurrencies like Bitcoin.
Introduced by Rep. Jordan Pace, the bill establishes a Strategic Digital Assets Reserve and specifically mentions Bitcoin as a key asset. It authorizes State Treasurer Curtis Loftis to hold up to one million BTC in the reserve and invest in Bitcoin across various state-managed funds. While the focus is on Bitcoin, the bill allows for the inclusion of other digital assets.
The decision to drop the lawsuit against Coinbase and the introduction of the Strategic Digital Assets Reserve Act highlight South Carolina’s growing interest in embracing cryptocurrencies and blockchain technology. This move positions the state as a forward-thinking player in the evolving landscape of digital assets.
Overall, the resolution of the lawsuit and the introduction of crypto-friendly legislation signal a positive step forward for South Carolina in the realm of cryptocurrency regulation and adoption.