The Alabama Securities Commission has withdrawn from a lawsuit filed in June 2023 against cryptocurrency exchange, Coinbase, accusing the company of violating securities laws by offering staking services to customers in Alabama.
According to the commission’s director, Amanda Senn, the ASC recognized that litigation on the matter would be both costly and ultimately unnecessary.
“By all accounts, a regulatory framework appears imminent, so it made sense for us to table our litigation posture and allow time for policymakers to continue their good work,” Senn said in a statement. “Our action should not, however, be taken by anyone that we will not litigate if an appropriate regulatory scheme is not adopted. I do not approve of any player in the financial industry operating outside of a regulatory framework.”
“It’s necessary to build investor trust and confidence, and to promote market stability and integrity.”
Senn pointed to the formation of two crypto-related federal task forces as a key factor in the commission’s decision to drop the lawsuit.
“In the interim, two important working groups were formed-the President’s Working Group on Digital Asset Markets and the SEC’s Crypto Task Force- and we believe they will accomplish what they set out to do,” she said.
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We're halfway there: Alabama just dropped its enforcement action against @coinbase – cutting the number of states with misguided staking suits in half in just two months. 1/3 pic.twitter.com/MWVnl30BTl
— paulgrewal.eth (@iampaulgrewal) April 23, 2025
Coinbase’s Chief Legal Officer, Paul Grewal, welcomed the ASC’s decision, celebrating it as a positive step towards regulatory clarity. He urged the remaining states—California, Maryland, New Jersey, Washington, and Wisconsin—to reconsider their positions, noting that continued litigation may deprive consumers of the opportunity to earn rewards through staking services.
Alabama originally joined the litigation alongside California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin. As of now, after Alabama’s departure, five other states remain involved in the lawsuit.
The broader context of this development includes a shift in the federal regulatory landscape under the Trump administration, which has adopted a more lenient approach towards cryptocurrency regulation. The SEC has recently formed a task force aimed at providing guidance for the regulation of cryptocurrency products and services, signaling a move towards clearer and more consistent oversight.
Austen Shipley is the News Director for Yellowhammer News. You can follow him on X @ShipleyAusten
