Kentucky Ends lawsuit Against Coinbase,Boosting Crypto Staking
Kentucky has dropped its lawsuit against Coinbase,ending the legal battle over the exchange’s staking services. This move makes Kentucky the third U.S. state to withdraw its case against Coinbase in recent months.
On March 31, Kentucky’s Department of financial Institutions filed a dismissal, closing the case that accused Coinbase of offering unregistered securities through staking. Following this,Coinbase’s Chief Legal Officer,Paul Grewal,called for federal clarity on crypto regulations.
“Congress must establish a federal market structure law to end the state-by-state litigation approach,” Grewal stated on X.
Kentucky’s decision follows similar actions by vermont and South Carolina. Vermont withdrew its case on March 14, citing the dismissal of the U.S. Securities and Exchange Commission’s federal lawsuit against Coinbase. The SEC dropped its case on February 27 to rethink crypto regulation.
South carolina dismissed its lawsuit shortly after Vermont, with Grewal noting that local users lost about $2 million in staking rewards due to the ban.Coinbase quickly reinstated staking services in South carolina.
Originally, ten states targeted Coinbase in June 2023 after the SEC’s lawsuit. They argued that Coinbase’s staking program was an unregistered securities offering. Now, seven states still have pending actions against Coinbase.
Kentucky’s move comes less than a week after Governor Andy Beshear signed the “Bitcoin Rights” bill.This law protects self-custody rights, allows blockchain node operations, and shields mining from discriminatory rules.Lawmakers are also considering a proposal to allocate up to 10% of state reserves into Bitcoin.
