South Carolina dropped charges brought against Coinbase and is now pursuing a new bill for Bitcoin Reserve.
South Carolina has confirmed the dismissal of the lawsuit brought against Coinbase – the US’ largest crypto exchange – for allegedly illegal staking. After a joint request with Coinbase, the Attorney General has confirmed that the Securities Division officially retracted the case on 27 March. South Carolina followed Vermont’s lead and withdrawn legal action as well against Coinbase.
South Carolina Drops Coinbase Case
A coordinated group of nine states made the same accusations in June 20,23. Coinbase was accused by the states of providing unregistered security disguised as crypto staking. Holders of existing tokens were rewarded for staking their coins to validate transactions on the blockchain.
Paul Grewal the Coinbase Chief Legal Executive hailed this dismissal by posting an X, signaling a dawning new era as South Carolina and Vermont joined Vermont to put an end to the unfounded stake lawsuit. The move, he said, was not just a win for Coinbase. It also benefited American consumers.
Grewal criticized the restrictions, saying that they deny South Carolinans the opportunity to earn $2 million in staking rewards. According to the executive, staking is available in South Carolina via both apps and websites.
This action coincided with an alleged violation of US securities laws by the Securities and Exchange Commission. Securities watchdog dismissed its case on 27 February, suggesting that the regulatory approach towards accepting crypto staking has changed.
Coinbase, despite dropping its case, faces legal action in eight states alleging the platform had failed to register securities under state laws.
According to the lawsuits, the Brian Armstrong led crypto exchange sold unregistered security via its staking services. Prosecutors suggested users will receive rewards for depositing crypto assets. This is mainly in the form of a percentage. State securities laws were cited as the basis for cease-and desist orders.
Grewal emphasized the need for consumer protection and clear rules. South Carolina is delivering justice in his opinion and he hopes other states will review their bans on crypto staking.
South Carolina welcomes Crypto
South Carolina has confirmed legal developments a day following the dismissal of Coinbase’s suit with a bill that will guide investment in digital assets. Jordan Pace, a Representative from South Carolina, introduced the Strategic Digital Assets Reserve Act.
The proposal allows the treasurer of the state to dedicate 10% to digital assets. South Carolina’s bill, unlike other proposals for crypto reserves, captures Bitcoin in multiple ways. It would be possible to create a Bitcoin Reserve capped at 1,000,000 BTC if the South Carolina bill was approved. The goal is similar to the one set by the federal government for establishing the Strategic Bitcoin Reserve.
The Treasurer will add BTC along with other investments funds in the Treasury to all state funds including General Funds and Stabilization Reserve Funds.‘s office. The bill focuses primarily on Bitcoin, but the reserve proposed would also include other cryptos. The proposal makes no mention of Ethereum or stablecoins.
The State’s Crypto Agenda
South Carolina’s proposal follows a growing trend, where more than 36 States have active bills on Bitcoin reserve. It shows that there is a greater interest at state level in digital assets.
In March, President Donald Trump signed an executive order to create a BTC strategic reserve and a stockpile of digital assets. US leaders are aiming to allocate the assets seized from criminals in order to build the federal reserve.
South Carolina is a model of a state that has moved away from regulation and towards facilitating the adoption of digital assets. The dual actions of the state could become a model for the other eight states as they strike a regulation-innovation balance within the crypto space.
Coinbase, for example, has expanded in the United States as a result of the pro-crypto agenda. Coinbase acquired Deribit, a crypto-exchange in India. This coincided with the company’s recent entry into the Indian market.
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Source: e-cryptonews.com
