Dismissal: South Carolina Drops Coinbase Staking Lawsuit
In a recent development, South Carolina has become the latest state in the US to drop its lawsuit against the cryptocurrency exchange Coinbase. The lawsuit had alleged that Coinbase’s staking services constituted the offering of unregistered securities.
The dismissal became official on March 27th, formalized through a joint stipulation between Coinbase and the South Carolina Attorney General’s securities division.
Paul Grewal, Coinbase’s chief legal officer, announced the news via an X post on March 27th, stating, “South Carolina just joined Vermont in dismissing its unfounded staking lawsuit against Coinbase,” said.
“This is not just a victory for us, but for American consumers and we hope it’s a sign of things to come in the few states left that restrict staking.”
South Carolina Attorney General and Coinbase’s joint stipulation. Source: South Carolina Attorney General
Interestingly, South Carolina and Vermont were among ten US states that initiated legal proceedings against Coinbase’s staking services back on June 6, 2023 – a day that also saw the federal securities regulator file its own lawsuit against the exchange.
Notably, the Securities and Exchange Commission (SEC) had already dismissed its lawsuit against Coinbase earlier, on February 27, 2025.
The other eight states involved in similar enforcement actions against Coinbase were Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin.
Grewal expressed his hope that other states would follow suit and pointed out that residents of South Carolina had reportedly missed out on an estimated $2 million in staking rewards because of the lawsuit.
“The 52 million Americans who own crypto deserve commonsense consumer protections and clear rules,” he said. “We applaud South Carolina for standing up for justice and hope the remaining states with bans on staking will take notice.”
South Carolina introduces Bitcoin reserve bill
Shifting gears slightly, there’s also movement on the legislative front in South Carolina. On March 27th, a state lawmaker introduced the “Strategic Digital Assets Reserve Act of South Carolina.” This proposed legislation could potentially allow the state treasurer to allocate up to 10% of specific state funds to cryptocurrencies, with Bitcoin being specifically mentioned.
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What makes South Carolina’s House Bill 4256, introduced by Rep. Jordan Pace, stand out from many other US state crypto reserve bills is its explicit mention of Bitcoin on multiple occasions in relation to the proposed Strategic Digital Assets Reserve.
Source: Jordan Pace
According to the bill, South Carolina’s treasurer, currently Curtis Loftis, would be authorized to set up a Bitcoin reserve capped at 1 million Bitcoin. Interestingly, this ambition aligns with the US federal government’s recently announced Strategic Bitcoin Reserve, which also aims to reach or surpass a similar level.
This bill would grant the treasurer the flexibility to include Bitcoin in various state funds, including South Carolina’s General Fund, the Budget Stabilization Reserve Fund, and any other investment funds under their management.
Related: Coinbase files FOIA to see how much the SEC’s ‘war on crypto’ cost
While no mention of stablecoins, non-fungible tokens (NFTs), Ether
, or other crypto tokens, it clarifies that the Strategic Digital Assets Reserve is not exclusively limited to Bitcoin.
According to Bitcoin Law, it seems this trend might be gaining momentum, with 42 Bitcoin reserve bills already introduced across 19 states, and a significant 36 of them still active.
Adding to this national conversation around digital asset reserves, earlier this month, US President Donald Trump signed an executive order to establish both a Strategic Bitcoin Reserve and a broader Digital Asset Stockpile. Initially, these reserves are planned to be funded using cryptocurrency seized in government criminal cases.
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