South Carolina has become the most recent US state to withdraw its lawsuit against cryptocurrency exchange Coinbase regarding its staking services, which accused the exchange of presenting unregistered securities.
The legal action was formally dismissed in a mutual agreement between the crypto exchange and the South Carolina Attorney General’s securities division on March 27.
“South Carolina has now followed Vermont in quashing its baseless staking lawsuit against Coinbase,” stated the firm’s chief legal officer, Paul Grewal, in a post on X on March 27.
“This represents not only a win for us but for American consumers, and we are hopeful it indicates positive changes in the few states remaining that impose restrictions on staking.”
Joint stipulation of South Carolina Attorney General and Coinbase. Source: South Carolina Attorney General
South Carolina and Vermont were among 10 US states that initiated legal proceedings against Coinbase’s staking services on June 6, 2023 — coinciding with the federal securities regulator filing its lawsuit against the crypto exchange.
The Securities and Exchange Commission officially dropped that case on February 27, 2025.
The other eight US states that pursued legal action similar to South Carolina’s were Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin.
Grewal expressed his desire to see other states emulate this decision, noting that residents of South Carolina collectively lost around $2 million in staking rewards due to the lawsuit.
“The 52 million Americans who possess cryptocurrency merit sensible consumer protections and unambiguous regulations,” he remarked. “We commend South Carolina for advocating for justice and hope the remaining states that have banned staking will take heed.”
South Carolina proposes Bitcoin reserve legislation
In the meantime, a legislator has recently introduced the “Strategic Digital Assets Reserve Act of South Carolina” on March 27, which could permit the state treasurer to allocate as much as 10% of certain state funds to cryptocurrencies like Bitcoin (BTC).
Distinct from most US state cryptocurrency reserve legislations, North Carolina’s House Bill 4256, put forward by Rep. Jordan Pace, mentioned Bitcoin multiple times concerning the Strategic Digital Assets Reserve that the legislation aims to create.
Source: Jordan Pace
The legislation empowers South Carolina’s treasurer, presently Curtis Loftis, to create a Bitcoin reserve that does not exceed over 1 million Bitcoin — a significant target that the US federal government is also aiming to reach or surpass with its newly created Strategic Bitcoin Reserve.
The treasurer would be authorized to incorporate Bitcoin into South Carolina’s General Fund, the Budget Stabilization Reserve Fund, or any other investment fund under their management.
Related: Coinbase files FOIA to determine the cost of the SEC’s ‘war on crypto’
While there was no reference to stablecoins, non-fungible tokens, Ether (ETH) or any other cryptocurrencies, the House bill indicated that the Strategic Digital Assets Reserve would not be restricted to Bitcoin.
According to Bitcoin Law, 42 Bitcoin reserve bills have been proposed at the state level across 19 states, with 36 of those 42 bills still active.
Earlier this month, US President Donald Trump signed an executive order to establish a Strategic Bitcoin Reserve and a Digital Asset Stockpile, both of which will initially utilize cryptocurrency forfeited in federal criminal proceedings.
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