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South Carolina has reversed its stance and dropped the legal action against Coinbase over staking, a move that mirrors Vermont’s recent decision.
This shift has led to the resumption of staking activities within the state, which, according to Coinbase’s Chief Legal Officer Paul Grewal, means South Carolina residents could reclaim approximately $2 million in staking rewards that were previously blocked by the lawsuit.
Grewal also praised the decision, advocating for clear regulations and protections for the millions of crypto owners across the U.S.
The state’s retreat from the case follows the SEC’s decision to dismiss its own lawsuit against Coinbase last month, which had been filed in 2023. The legal challenge from the SEC sparked a wave of lawsuits from several states, including California, Maryland, and Alabama, who pursued their own legal actions against the prominent exchange.
While some states have already dismissed their cases, it remains unclear whether the SEC’s change of heart will influence other states to follow suit.
Originally, the SEC had argued that Coinbase needed to register its staking services, but with the agency’s evolving focus on crypto, it seems likely that future regulatory guidance will be issued on staking activities.
As part of a broader effort to shift away from former Chair Gary Gensler’s controversial policies, the SEC also dismissed cases against other companies like Kraken, ConsenSys, and Cumberland. The outcome could pave the way for a more favorable regulatory environment for crypto exchanges and their users.
