South Carolina Ends Legal Action Against Coinbase As State Considers Bitcoin Reserves
South Carolina has dismissed its lawsuit against Coinbase regarding its staking services, according to a joint stipulation filed on March 27. The state joins Vermont in dropping legal action that had accused the crypto exchange of offering unregistered securities.
"South Carolina just joined Vermont to dismiss its unfounded staking lawsuit against Coinbase," said Paul Grewal, Coinbase's chief legal officer, in a post on X. Grewal noted that South Carolina residents lost an estimated $2 million in staking rewards due to the lawsuit.
The Securities and Exchange Commission had previously dismissed its own lawsuit against Coinbase on February 27, 2025. South Carolina and Vermont were among ten states that took legal action against Coinbase's staking services on June 6, 2023.
The remaining states that still have active lawsuits against Coinbase include:
- Alabama
- California
- Illinois
- Kentucky
- Maryland
- New Jersey
- Washington
- Wisconsin
In a parallel development, South Carolina State Representative Jordan Pace introduced the "Strategic Digital Assets Reserve Act of South Carolina" on March 27. The bill would allow the state treasurer to allocate up to 10% of certain state funds to cryptocurrencies, primarily Bitcoin.
Unlike most state crypto reserve bills, House Bill 4256 mentions Bitcoin specifically and would permit the treasurer to establish a Bitcoin reserve capped at 1 million Bitcoin. The bill allows for investments from South Carolina's General Fund and the Budget Stabilization Reserve Fund.
According to Bitcoin Law, 42 Bitcoin reserve bills have been introduced at the state level across 19 states, with 36 still active. This state-level movement follows US President Donald Trump's recent executive order creating a Strategic Bitcoin Reserve and a Digital Asset Stockpile at the federal level.
North Carolina has recently advanced its own Bitcoin legislation with Senate Bill 327, introduced on March 19 by Republican Senators Todd Johnson, Brad Overcash, and Timothy Moffitt. The bill would allow the State Treasurer to invest up to 10% of public funds in Bitcoin and create a Bitcoin Economic Advisory Board. The legislation requires secure storage protocols and strict controls on Bitcoin liquidation, requiring two-thirds General Assembly approval for sales.
