South Carolina just dropped its lawsuit against Coinbase, making it the second state to back down after a shift in the US government’s approach to crypto. Coinbase’s Chief Legal Officer (CLO) is calling it a huge win for crypto investors.
South Carolina’s Retreat
Coinbase’s CLO, Paul Grewal, announced that South Carolina dismissed its case. This follows Vermont’s earlier decision to drop its lawsuit. This all started last June when ten states, including South Carolina, accused Coinbase of breaking securities laws with its staking rewards program. They argued Coinbase offered staking without the proper registration. The SEC also sued Coinbase around the same time for similar reasons.
A Changing Tide for Crypto Regulation?
Vermont’s decision to drop its case earlier this month was based on the SEC’s dismissal of its own case against Coinbase and the ongoing changes in crypto regulation. South Carolina’s court document stated that dropping the case was “in the best interests of justice.” Grewal points out that South Carolina investors lost over $2 million because of the lawsuit, highlighting this as a victory for the millions of Americans who invest in crypto. He hopes other states will follow suit.
Softer Stance from the SEC?
Things are looking less hostile for the crypto industry. The SEC, under acting chair Mark Uyeda, is trying to create clearer rules and regulations, even seeking public input. Recently, they’ve dropped or paused several big crypto lawsuits, including cases against Coinbase, Robinhood, and Binance. They even closed an investigation into Crypto.com without taking action and dropped lawsuits against Kraken, Consensys, and Cumberland. The Ripple case is a bit different and requires additional steps before it can be officially dropped.
