The Alabama Securities Commission, a monetary authority for the US state, terminated its lawsuit against cryptocurrency exchange Coinbase, which had accused the business of infringing upon securities laws by providing staking services to clients.
The authority referenced the ongoing collaboration between the US Securities and Exchange Commission (SEC) and the crypto sector aimed at establishing clear regulations for cryptocurrency as the main rationale behind dropping the case, as per the legal submission dated April 23 that was shared by Coinbase’s chief legal officer, Paul Grewal.
The submission stated:
“The SEC has revealed the creation of a new task force to, among other things, offer guidance for the enactment of rules concerning the oversight of cryptocurrency products and services.”
“In light of this, the Commission believes it is prudent to grant policymakers time to evaluate regulatory frameworks,” the submission elaborated.
The Alabama Securities Commission initiated its lawsuit against Coinbase in June 2023, in conjunction with state regulators from California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin.
The Commission’s decision to retract the lawsuit indicates a favorable regulatory shift toward cryptocurrencies in the United States as changes at the federal level transition into state-level regulatory policies.
Related: Oregon pursues Coinbase after SEC drops its federal lawsuit
US states withdraw Coinbase lawsuit but half remain steadfast
Five out of the 10 states that initiated the legal action against Coinbase for its staking services have retracted their lawsuits.
On March 13, Vermont’s Department of Financial Regulation became the first among the 10 state regulators to withdraw the staking lawsuit against Coinbase.
South Carolina’s securities regulator was the next to annul the 2023 litigation against Coinbase, terminating the lawsuit on March 28.
Grewal announced that Kentucky’s Department of Financial Institutions followed the precedent set by Vermont and South Carolina on April 1 by also annulling its lawsuit against Coinbase.
Despite the chain reaction of states rescinding their lawsuits against the cryptocurrency exchange, the Coinbase chief legal officer indicated that additional efforts are required.
“Five states are still choosing to squander taxpayer funds on lawsuits, and four of these have prohibited staking with Coinbase, depriving consumers of the opportunity to earn through their platform of choice,” Grewal commented in an April 23 X post.
Magazine: SEC’s reversal on crypto raises significant questions
