Illinois to End Lawsuit Against Coinbase Over Staking Program: Report

Illinois will put a pin in its lawsuit against Coinbase over the exchange’s staking services, a spokesperson for Secretary of State, Alexi Giannoulias, said Thursday.

“The office intends to drop the Coinbase lawsuit,” Giannoulias’ spokesperson told crypto media outlet CoinDesk. No timeline for the dismissal was provided.

The decision makes Illinois the fourth state to abandon litigation over the past month.

Vermont was the first state to dismiss its lawsuit on March 13, followed by South Carolina on March 27, with Kentucky filing on March 31.

The state-level retreats follow the Securities and Exchange Commission’s February decision to drop its own federal lawsuit against Coinbase, signaling a broader regulatory shift in crypto oversight under the Trump administration.

All ten state lawsuits were filed in June 2023 and were primarily based on the SEC lawsuit, which alleged Coinbase violated securities laws through its staking program that allowed crypto holders to earn rewards by locking up digital assets.

Regulators claimed these services constituted unregistered securities offerings. The ten states followed.

Illinois’ withdrawal is particularly critical as the state simultaneously advances a Bitcoin strategic reserve bill, proposing to create a dedicated fund to hold Bitcoin as a financial asset for at least five years.

Four down, six to go

So far, six states have not made any changes or taken any action to withdraw their lawsuits against the exchange: Alabama, California, Maryland, New Jersey, Washington, and Wisconsin.

Officials from New Jersey and Washington confirmed their cases remain active, according to the initial report. Meanwhile, the four other remaining states have made no public statement on pending litigation.

Decrypt has reached out to the states of Alabama, California, Maryland, and Wisconsin to confirm.

Coinbase has consistently claimed to advocate for clearer federal regulation rather than state-by-state enforcement.

Following earlier dismissals, Coinbase Chief Legal Officer Paul Grewal urged Congress to “end this litigation-driven, state-by-state approach with a federal market structure law.”

Edited by Sebastian Sinclair