- South Carolina dropped its lawsuit against Coinbase over staking services filed in June 2023.
- A new state bill may allow the treasurer to invest in Bitcoin for South Carolina’s public funds.
- Eight US states still have active enforcement actions against Coinbase for staking activities.
South Carolina has officially dismissed its lawsuit against cryptocurrency exchange Coinbase. The case, centered around staking services, was withdrawn through a joint stipulation filed on March 27. The lawsuit had alleged that Coinbase offered unregistered securities.
This action follows Vermont’s similar move earlier in the year. Both states were among ten that took enforcement action on June 6, 2023. That date also marked the filing of a federal lawsuit against Coinbase by the Securities and Exchange Commission, which was dismissed on February 27, 2025.
Eight States Still Pursuing Enforcement
While South Carolina and Vermont have dropped their cases, eight other states remain active. These include Alabama, California, Illinois, Kentucky, Maryland, New Jersey, Washington, and Wisconsin. Each filed similar actions in coordination with the SEC’s federal lawsuit.
Coinbase’s legal team estimates that South Carolina users lost around $2 million in staking rewards during the case. The company continues to push for consistent and clear regulations on staking across all states.
New Crypto Reserve Bill Introduced in South Carolina
A South Carolina state legislator presented the “Strategic Digital Assets Reserve Act of South Carolina” right after the dismissal of the lawsuit. The proposal as outlined in the bill grants the state treasurer permission to place up to 10% of specific state investments into digital currencies that include Bitcoin.
Unlike other state proposals, this bill makes multiple references to Bitcoin. It permits the treasurer to establish a reserve of up to one million Bitcoin. That ceiling aligns with goals set by the federal government for its Strategic Bitcoin Reserve.
Use of Bitcoin in State Funds
The bill gives the treasurer authority to allocate Bitcoin into key state accounts. These include the General Fund, the Budget Stabilization Reserve Fund, and other managed investment portfolios.
Though focused on Bitcoin, the bill does not exclude other digital assets. However, it does not mention stablecoins, NFTs, or Ethereum. The language leaves room for future expansion of eligible assets under the reserve.
Federal Action Reflects Growing Trend
South Carolina’s new bill comes amid a national shift toward integrating crypto into public finance. Earlier in March, the U.S. President signed an executive order to create a Strategic Bitcoin Reserve and Digital Asset Stockpile. These funds will be backed by digital assets seized in federal criminal cases.
According to Bitcoin Law, 42 state-level Bitcoin reserve bills have been introduced in 19 states. Of those, 36 remain active, reflecting a growing interest in digital asset reserves at both state and federal levels.
