Kentucky joins Vermont and South Carolina in dropping Coinbase staking suit
Kentucky’s finance watchdog has dismissed its lawsuit against Coinbase over the exchange’s staking rewards program, following its peers in Vermont and South Carolina.
Kentucky’s Department of Financial Institutions the stipulation to dismiss jointly with Coinbase on April 1, ending the state’s legal action against the exchange first filed along with 10 other state regulators in June 2023.
Coinbase chief legal officer Paul Grewal to X on April 1, calling for Congress “to end this litigation-driven, state-by-state approach with a federal market structure law.”
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Financial regulators from 10 states against Coinbase in June 2023, on the same day the Securities and Exchange Commission sued the exchange — a lawsuit the SEC dropped last month.
Seven suits against Coinbase still active
Alabama, California, Illinois, Maryland, New Jersey, Washington and Wisconsin are the seven states that are still continuing with their lawsuits, which all allege Coinbase breached securities laws with its staking rewards program.
Vermont was the first state to end its suit against Coinbase, with its Department of Financial Regulation to rescind the action on March 13, noting the SEC’s Feb. 27 decision to drop its action against the exchange and the in the federal regulator’s guidance.
The South Carolina Attorney General’s securities division followed Vermont days later, in a joint stipulation with Coinbase on March 27.
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Kentucky’s decision to drop its case against Coinbase follows just days after the state’s governor, Andy Beshear, signed a “Bitcoin Rights” bill that establishes protections for crypto self-custody and exempts crypto mining from money transmitting and securities laws.
The axed state-level lawsuits come amid a stark policy change at the SEC, which has dropped or delayed multiple lawsuits against crypto companies that it filed under the Biden administration.
The federal securities watchdog has also created a Crypto Task Force that is engaging with the industry on how it should approach cryptocurrencies.
