Coinbase Resumes Staking Activity in Alabama Amid Enforcement Action Suspension

Alabama, a state in the southeastern United States, has officially dropped its enforcement action against Coinbase. The exchange’s chief legal officer, Paul Grewal, shared this significant milestone on the social media platform X.

In June 2023, 10 U.S. state regulators, including those from Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin, accused the crypto exchange of violating securities laws.

About four states had gone so far as to ban Coinbase’s staking program entirely within their jurisdictions. This action limited residents’ ability to participate in this key aspect of decentralized finance (DeFi).

Coinbase has consistently maintained that its staking services are not securities and that they are transparent, safe, and beneficial for retail users. The company has urged regulators to provide clear rules rather than pursue enforcement actions that create confusion and stifle innovation. Now, with Alabama stepping back, the tide appears to be turning.

Alabama Drops Staking Lawsuit

According to Grewal, the latest development now cuts the number of states pursuing legal actions against Coinbase’s staking program in half within just two months.

“Five holdouts are still electing to waste taxpayer resources on lawsuits, and four of those have banned staking with Coinbase, depriving consumers of the right to earn on their platform of choice,” he stated.

With Alabama withdrawing its lawsuit, only a small number of regulators remain engaged in what the exchange sees as overreaching enforcement. Last month, South Carolina took similar steps and dismissed its lawsuit against crypto exchange Coinbase. Then, the exchange’s CLO called the development a “victory” for crypto investors.

Regulatory Shift for Crypto?

There’s no denying that the US crypto landscape has become friendlier under the administration of Donald Trump. Several high-profile cryptocurrency lawsuits have been dismissed over the past two months, including those involving Coinbase, Kraken, Robinhood, and Binance.

Notably, Paul Atkins was officially sworn in as the 34th Chairman of the U.S. Securities and Exchange Commission (SEC) earlier today. During the ceremony, he pledged to make the country the safest and most favourable place in the world for all crypto-related activities. Atkins’s appointment has been welcomed by notable industry figures, many of whom expect a more crypto-friendly regulatory environment.

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