YEREVAN (CoinChapter.com) — Vermont’s Department of Financial Regulation has dropped its staking lawsuit against Coinbase, following the Securities and Exchange Commission’s (SEC) decision to dismiss a similar case. The regulator announced on March 13 that it would rescind the show cause order without prejudice, allowing the case to be reopened if necessary.
The legal action, filed in 2023, accused Coinbase of offering unregistered securities through its staking service. Vermont’s move comes after the SEC’s Feb. 28 dismissal of its case against the crypto exchange, signaling a shift in the approach to staking regulations.
SEC’s Dismissal Leads to Vermont’s Decision
The SEC dropped its lawsuit against Coinbase staking services, prompting Vermont to reconsider its legal action. The Department of Financial Regulation cited the formation of a new SEC task force that will focus on crypto regulations and federal guidance.
“In light of the dismissal of the Federal Action and likelihood of new federal regulatory guidance, the Division believes it would be most efficient and in the best interests of justice to rescind the pending Show Cause Order, without prejudice,” Vermont’s statement said. The state had previously claimed that Coinbase staking violated securities laws and demanded that the exchange justify why it should not be forced to halt the service. Now, Vermont has followed the SEC’s lead, suggesting that federal guidance may soon clarify the staking regulatory framework.
10 States Took Action Against Coinbase Staking
Vermont was one of 10 states that filed legal action against Coinbase staking on June 6, 2023, the same day the SEC launched its federal lawsuit. Other states included Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Washington, and Wisconsin. The lawsuits alleged that Coinbase staking services operated as unregistered securities offerings, requiring licenses under state and federal laws. Regulators argued that users participating in staking programs were investing in securities without proper protections. With Vermont withdrawing, attention is now on whether the remaining states will make similar decisions regarding their cases against Coinbase staking.
Coinbase’s Legal Chief Responds to Vermont’s Decision
Following Vermont’s withdrawal, Coinbase Chief Legal Officer Paul Grewal commented on March 13, stating that other states should also reconsider their staking lawsuits.
“As we have always said: staking services are not securities. We applaud Vermont for embracing progress and providing clarity for its citizens who own digital assets,” Grewal said on X.
He also urged Congress to pass new crypto legislation that takes into account the unique aspects of staking services.
SEC’s Crypto Lawsuits Are Declining
Several crypto firms have seen legal cases dismissed in recent months, particularly after the resignation of former SEC Chair Gary Gensler on Jan. 20. On March 4, crypto trading firm Cumberland DRW had its case dropped, adding to a growing list of crypto enforcement actions that are being rolled back.
The SEC’s case against Ripple Labs, which has lasted more than four years, is also reportedly nearing an end. Grewal has filed a Freedom of Information Act (FOIA) request to determine how many crypto enforcement actions the SEC initiated between April 17, 2021, and January 20, 2025, and the cost to taxpayers. The ongoing legal shifts could impact how staking regulations and crypto enforcement develop in the future.