In a notable advancement for the cryptocurrency industry, the Alabama Securities Commission has officially dropped its enforcement action against Coinbase related to the exchange’s staking program. This move reduces the number of U.S. states pursuing legal action against Coinbase over staking from ten to five, effectively halving the ongoing state-level lawsuits within just two months.
Paul Grewal, Coinbase’s Chief Legal Officer, announced the development on X (formerly Twitter), emphasizing that Coinbase is now “halfway there” in resolving these staking-related legal challenges. He highlighted that five states have recently dismissed their cases, signaling a shift in regulatory attitudes toward crypto staking services.
Background on the Lawsuit and Staking Program
The Alabama Securities Commission, along with nine other states including California, Illinois, Maryland, and Washington, had filed enforcement actions in 2023 accusing Coinbase of offering unregistered securities through its staking rewards program. This program allows users to lock up digital assets to validate blockchain transactions in exchange for rewards, while Coinbase takes a commission. Regulators argued that this arrangement constituted an investment contract requiring securities registration.
Broader Context and Industry Impact
The withdrawal of Alabama’s case reflects a broader trend in 2025, where anti-crypto litigation is declining amid evolving policy discussions and a more favorable regulatory environment under the current U.S. administration. This follows the U.S. Securities and Exchange Commission’s (SEC) earlier decision to drop its high-profile enforcement action against Coinbase, signaling a shift toward clearer and more transparent crypto regulation.
Grewal criticized the remaining five states still pursuing lawsuits, describing their actions as a waste of taxpayer resources and calling for federal lawmakers to enact comprehensive crypto regulations. He urged Congress to establish a unified framework to end the patchwork of state-level legal battles and provide clarity for the industry’s future.
