Alabama Drops Coinbase Suit Amid Crypto Shakeup
Key Takeaways
The Alabama Securities Commission has withdrawn its lawsuit against Coinbase, following the example of Vermont and South Carolina. The case was based on allegations that Coinbase’s staking service constituted an unregistered securities offering. However, five other U.S. states are still pursuing legal action against the platform. Meanwhile, Coinbase is planning to launch new regulated crypto derivatives in the United States.
Alabama Withdraws Lawsuit – A Signal for Greater Regulatory Clarity
On April 23, 2025, the Alabama Securities Commission officially dismissed its lawsuit against Coinbase. This decision was confirmed through a court document made public by Coinbase’s Chief Legal Officer, Paul Grewal. Alabama was one of ten U.S. states that initiated legal proceedings against Coinbase in June 2023, alleging that the company’s staking program violated securities laws.
Staking involves users providing their cryptocurrencies to validate transactions on a blockchain network, in return for rewards. Coinbase offers this service as an intermediary, retaining a commission for its role.
Regulatory Authorities Focus on Collaboration
The withdrawal of the lawsuit indicates a shift in direction. According to the court document, the U.S. Securities and Exchange Commission (SEC) is planning to establish a new task force. This group will work on developing rules for handling crypto products and services. The goal is to achieve more consistent and transparent regulation at the federal level.
More States Dropping Legal Action
Alabama is not alone. In March 2025, Vermont (on March 13) and South Carolina (on March 28) also dropped their lawsuits against Coinbase. In total, five of the original ten states have now ended their proceedings. This development suggests a gradual shift in attitudes toward crypto staking.
Five States Continue Legal Proceedings
Despite some states stepping back, Coinbase remains under legal pressure. California, Maryland, New Jersey, Washington, and Wisconsin are continuing their cases. In four of these states, staking through Coinbase is currently prohibited. Paul Grewal has publicly criticized these actions, accusing the authorities of wasting resources and restricting consumer rights.
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Coinbase Plans New Products Despite Legal Uncertainty
Regardless of the ongoing legal proceedings, Coinbase is continuing to expand its product offerings. The company is preparing to launch around-the-clock tradable Bitcoin and Ethereum futures. These products will be regulated by the Commodity Futures Trading Commission (CFTC), the U.S. agency responsible for overseeing derivatives trading. This would represent the first regulated offering of its kind in the United States.
Our Assessment
Alabama’s withdrawal of its lawsuit is a positive signal for the crypto industry. It shows that regulatory authorities are increasingly focusing on collaboration and clear rules. However, Coinbase remains under scrutiny in several states. For users, this means that the legal landscape for staking in the U.S. remains inconsistent. Anyone active in this area should closely review local regulations. Coinbase continues to pursue innovation and regulation—a strategy that could build long-term trust.
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