- Paul Grewal, Coinbase’s chief legal officer, said their “work isn’t over”
- Vermont issued a Show Cause Order shortly after the SEC filed a lawsuit against Coinbase in 2023
- The SEC dropped its lawsuit against Coinbase in February
The US state of Vermont has dropped its legal case against Coinbase over its staking services, earning the exchange another significant victory.
In a post on X, Paul Grewal, Coinbase’s chief legal officer, said: “As we have always said: staking services are not securities. We applaud Vermont for embracing progress and providing clarity for its citizens who own digital assets.”
Grewal added that their “work isn’t over” and that “other states with staking actions should take a page from Vermont’s playbook.”
Today the State of Vermont dismissed its action against @Coinbase regarding staking services. As we have always said: staking services are not securities. We applaud Vermont for embracing progress and providing clarity for its citizens who own digital assets. 1/3
— paulgrewal.eth (@iampaulgrewal) March 13, 2025
News of this comes after the US Securities and Exchange Commission (SEC) dropped its lawsuit against Coinbase in February. The agency sued Coinbase in 2023, accusing it of operating as an unregistered securities exchange.
Show Cause Order
Vermont was one of 10 states, including Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin, that took legal action against Coinbase in 2023. At the time, they argued that the platform’s staking services met the definition of securities under their laws.
In Vermont’s Department of Financial Regulation document, it reads:
“In light of the dismissal of the Federal Action and likelihood of new federal regulatory guidance, the Division believes it would be most efficient and in the best interests of justice to rescind the pending Show Cause Order, without prejudice.”
A show cause order is when a court orders a party to explain why a specific action shouldn’t be enforced. In Coinbase’s case, the show cause order argued that the platform was offering its users staking services without a license and, as such, violated securities laws.
However, since the new administration has entered the White House, the SEC has switched tracks, taking a more pro-crypto approach. Former SEC chair Gary Gensler has left and Mark Uyeda is helming the agency as acting chair. Trump has already named Paul Atkins as the incoming SEC chair.
Other lawsuits the SEC has dropped include those against Kraken, Robinhood Crypto, and Uniswap.
