Authorities from three U.S. states—Kentucky, Vermont, and South Carolina—have decided to withdraw their lawsuits against the cryptocurrency exchange Coinbase, following the lead of the U.S. Securities and Exchange Commission (SEC). The regulator closed its case against the company at the end of February 2025.
This is reported by Finway
The Kentucky financial regulator made the decision to withdraw its lawsuit on March 31, 2025, South Carolina did so on March 26, and Vermont on March 13. Meanwhile, seven other states continue to support a collective lawsuit against Coinbase.
Background and Consequences
This process was initiated immediately after the SEC filed its lawsuit against Coinbase, accusing the company of violating federal laws through its Earn program. The staking of crypto assets, promoted through the platform, was considered an unregistered securities offering, despite the exchange’s refusal to shut down the program.
Paul Grewal, Coinbase’s chief legal officer, urged Congress to pass legislation that would regulate crypto assets at the federal level to avoid local discrepancies in legislation. He believes that oversight of the industry should be centralized.
Regulatory Changes
In addition to Coinbase, the SEC has closed several other cases, significantly changing its approach following the change in administration in the U.S. Previously, Coinbase CEO Brian Armstrong noted that U.S. authorities should legalize the right of stablecoin issuers to distribute profits in the form of interest from reserves among asset holders.