South Carolina Drops Lawsuit Against Coinbase Over Staking Services

South Carolina has officially dropped its lawsuit against cryptocurrency exchange Coinbase regarding its staking services, marking another win for the company in its legal battles across the United States.

According to a joint stipulation filed on March 27, the South Carolina Attorney General’s securities division and Coinbase agreed to dismiss the case, which had accused the firm of offering unregistered securities through its staking program.

The lawsuit was originally filed on June 6, 2023 — the same day Coinbase was hit with a separate federal lawsuit by the U.S. Securities and Exchange Commission (SEC), which itself was dismissed in February 2025.

Coinbase CLO Paul Grewal Hails South Carolina’s Dismissal of Lawsuit

Coinbase’s Chief Legal Officer, Paul Grewal, celebrated the decision in a post on X, stating, “South Carolina just joined Vermont to dismiss its unfounded staking lawsuit against Coinbase.”

Grewal called it a victory not only for the company but also for American crypto users and expressed hope that other states would follow.

And …. we're now live again w/ staking in South Carolina – including all entrypoints.

— paulgrewal.eth (@iampaulgrewal) March 28, 2025

South Carolina was one of 10 U.S. states that filed enforcement actions against Coinbase last June.

The remaining eight states — Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin — have yet to dismiss their cases.

Grewal claimed that the lawsuit led to an estimated $2 million in lost staking rewards for South Carolina residents.

“The 52 million Americans who own crypto deserve commonsense consumer protections and clear rules,” Grewal said, applauding South Carolina for “standing up for justice.”

South Carolina Introduces Strategic Digital Assets Reserve Act

In a parallel development, the US state is also making headlines for introducing crypto-forward legislation.

On the same day the lawsuit was dismissed, state lawmakers introduced the “Strategic Digital Assets Reserve Act of South Carolina,” which proposes that the state allocate up to 10% of certain funds into cryptocurrencies like Bitcoin.

Filed by Rep. Jordan Pace, the bill outlines the creation of a Strategic Digital Assets Reserve and explicitly references Bitcoin multiple times.

Proud to file legislation that empowers SC to follow @realDonaldTrump’s lead to create a state level strategic crypto reserve. This gives the Treasurer new tools to protect taxpayer dollars from inflation https://t.co/JqUuBw243D

— Jordan Pace (@Jscottpace) March 27, 2025

It authorizes State Treasurer Curtis Loftis to hold up to one million BTC in the reserve and invest in Bitcoin across various state-managed funds, including the General Fund and the Budget Stabilization Reserve.

While the bill focuses primarily on Bitcoin, it leaves room for other digital assets.