- Illinois will drop its staking-related lawsuit against Coinbase, its Secretary of State’s office has confirmed
- This decision aligns Illinois with Kentucky, Vermont, and South Carolina, which have recently withdrawn similar legal actions
- Six other states, including New Jersey and Washington, continue to pursue their cases against the crypto exchange
The Illinois Secretary of State’s office has indicated plans to withdraw its lawsuit against Coinbase concerning the company’s staking services. The move, revealed by CoinDesk, follows similar actions by Kentucky, Vermont, and South Carolina, reflecting a broader trend of states reassessing their legal approaches to cryptocurrency regulation. Despite these developments, six states, including New Jersey and Washington, maintain active litigation against Coinbase.
Coinbase’s Staking Platform Under the Microscope
In 2023, ten U.S. states, including Illinois, filed lawsuits against Coinbase, alleging that the exchange’s staking program violated state securities laws. Staking allows cryptocurrency holders to earn rewards by participating in network operations, a practice some regulators argued constituted unregistered securities offerings. The U.S. Securities and Exchange Commission (SEC) also pursued legal action against Coinbase on similar grounds but dropped its case in February.
The mass pulling of the cases against Coinbase is almost certainly a result of the recent shift in the U.S. political landscape, marked by President Donald Trump’s return to office, which has significantly influenced regulatory approaches toward the cryptocurrency industry. The Trump administration has adopted a more lenient stance on digital assets, leading to a raft of investigations and lawsuits concerning crypto companies being scrapped.
Illinois “Intends to Drop” Coinbase Suit
A spokesperson for Illinois Secretary of State Alexi Giannoulias stated that the office “intends to drop the Coinbase lawsuit.” However, no specific timeline for the dismissal was provided. This decision positions Illinois alongside Kentucky, Vermont, and South Carolina, which have recently ceased their legal actions against Coinbase.
Despite these withdrawals, six states—Alabama, California, Maryland, New Jersey, Washington, and Wisconsin—continue to pursue their lawsuits against Coinbase. Representatives from New Jersey and Washington confirmed that their cases remain active, while officials from California, Maryland, and Wisconsin declined to comment to CoinDesk. The Alabama Securities Commission has yet to respond to inquiries regarding the status of its case.
