The Kentucky has officially closed the legal proceedings against Coinbase related to the staking services offered by the exchange.
With this decision, the State joins Vermont and South Carolina in withdrawing the legal actions taken in recent months, confirming a trend reversal in state policies towards greater openness to the crypto sector.
The decision was formalized on March 31, through a joint filing submitted by the Kentucky Department of Financial Institutions.
The reason for the lawsuit? The accusation against Coinbase of having offered staking services as “unregistered securities.” An accusation that, at least in Kentucky, is no longer upheld.
Summary
A growing trend in Kentucky with Coinbase: away with the lawsuits, forward with pro-crypto legislation
The case of Kentucky is not isolated. In mid-March, Vermont withdrew its case after the SEC had previously filed its federal proceedings against Coinbase.
A few days later, on March 27, it was South Carolina’s turn, which withdrew its legal action following protests from local users, who had complained of losses of about 2 million dollars in staking rewards.
Paul Grewal, Chief Legal Officer of Coinbase, commented positively on X about Kentucky’s decision, urging Congress to intervene with a regulation that is consistent and unified at the federal level.
It also emphasized the bipartisan agreement in the State that staking, as well as mining, should not be treated as financial instruments.
Currently, legal proceedings against Coinbase remain ongoing in seven states: California, New Jersey, Illinois, Washington, Alabama, Maryland, and Wisconsin.
Simultaneously with the dismissal of the case, Kentucky approved a law of great significance for the crypto ecosystem. On March 28, Governor Andy Beshear signed House Bill 701, also known as the Bitcoin Rights Bill.
The law, unanimously approved in both chambers, establishes important rights for citizens and businesses operating in the bull and bear cryptocurrency sector.
Among the key points:
- Right to self-custody of digital assets
- Possibility to operate blockchain nodes without restrictions
- Free cryptocurrency transaction without fears of discriminatory regulations
- Protection for mining activities from penalizing urban planning regulations
- Clarity on staking regulations, excluding it from the category of financial securities
Furthermore, another bill is under discussion that would allow the State Investment Commission to invest up to 10% of the excess state reserves in Bitcoin and other cryptocurrencies.
A pro-Bitcoin legislative wave in the USA States
Kentucky is not the only state to embrace a positive view towards criptovalute.
Oklahoma has recently put forward the Strategic Bitcoin Reserve Act, a proposal to create a strategic reserve of BTC. Missouri and Arizona are following similar paths, considering the establishment of state funds in digital assets.
Even in South Carolina, the decision to dismiss the case against Coinbase was accompanied by the introduction of a law that authorizes the state treasurer to hold up to one million BTC as a digital reserve.
A measure proposed by the deputy Jordan Pace. The progressive withdrawal of lawsuits against Coinbase and the advancement of laws favorable to digital assets indicate a change in the attitude of state authorities.
More and more legislators seem to prefer regulatory clarity over legal repression, in open contrast to the SEC’s strategy.
These developments could accelerate the debate on a federal regulatory framework, hoped for by both industry operators and the political world.
The case of Kentucky, therefore, could represent a turning point: fewer lawsuits, more clarity. A message that resonates strongly in an America increasingly interested in defining its role in the future of cryptocurrencies.