Cryptocurrency exchange Coinbase is pushing for an end to the remaining state lawsuits targeting its staking services.
The push is being bolstered by the approach at the Securities and Exchange Commission (SEC), which dropped its case against Coinbase earlier this year as it moves away from the Biden-era "regulation by enforcement" trend.
Coinbase, in a blog post first reported by The Hill on Friday, claimed residents in five U.S. states are missing out on tens of millions of dollars in staking rewards as a result of the states’ ongoing litigation against the exchange.
“It’s time for these states to catch up with the SEC—and nearly every other state—and drop their unfounded cases,” wrote Ryan VanGrack, Coinbase’s vice president of legal and head of global litigation.
Crypto staking involves temporarily locking up a certain amount of cryptocurrency to participate in a blockchain network.
In exchange, users of trading platforms receive rewards, usually in the form of tokens, somewhat like interest rates in a savings account.
The SEC and 10 states’ suits alleged Coinbase failed to register its staking services as securities, though the exchange maintains its staking services are not securities and that no user has ever lost money through the process.
The bans, VanGrack argued, “single out” Coinbase and the holdout states are “arbitrarily picking winners and losers” as a result.
Coinbase, like many other popular crypto exchanges, is welcoming the Trump administration’s push for clarity in the regulation space, which has included the formation of a crypto task force at the SEC to look into staking and other crypto components.
The bigger picture: As the Trump administration seeks to turn a new leaf on crypto enforcement, not all states are as quick to reverse course. While states sometimes look to the federal level for direction, this may not be the case here.
It comes about a week after Oregon Attorney General Dan Rayfield filed a separate suit earlier this month accusing Coinbase of “encouraging” the “sale of unregistered cryptocurrencies” to Oregon residents.
In his suit, he claimed states must “fill the enforcement vacuum being left by federal regulators who are giving up under the new administration and abandoning these important cases.”
VanGrack told The Hill that Rayfield’s case “is not a case on the merits, it’s a case on the politics.”
