Coinbase urges the yet-unaffected U.S. states to abandon perplexing lawsuits regarding cryptocurrency staking practices
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Coinbase Urges End to Lawsuits Over Staking Services in select states
Cryptocurrency exchange Coinbase is pushing five U.S. states to drop their legal battles concerning its staking services, stating these actions harm consumers and create confusion.
In a bold statement on its blog, Coinbase, a leading public crypto exchange, argued that now, more than ever, the persistent lawsuits from California, New Jersey, Maryland, Washington, and Wisconsin are out of step with the broader regulatory landscape. The states' ongoing lawsuits have led to a significant loss for their residents, depriving them of estimated staking rewards totaling over $90 million since June 2023.
The crux of the issue revolves around claims that Coinbase's staking services equate to unregistered securities offerings. However, the exchange vigorously opposes this stance, asserting staking doesn't fit the definition of securities.
According to the exchange, these actions against Coinbase and only Coinbase may limit access to staking's passive income potential, pushing users towards hazardous alternatives.
In contrast, several crypto exchanges, including Kraken and Binance.US, offer staking services for a variety of cryptocurrencies, though their availability can vary by state.
Notably, Oregon recently took matters into its own hands by initiating a lawsuit against Coinbase, alleging the company failed to protect consumers from unregistered and risky cryptocurrencies and breached Oregon's securities laws.
Coinbase's chief legal officer, Paul Grewal, slammed Oregon's lawsuit, labeling it a "copycat" of the SEC's previous actions and rehashing arguments the federal agency previously abandoned.
Interestingly, an interesting development came up earlier this year when the SEC dropped its staking case against Coinbase in February 2025. Additionally, five other states, including Alabama and Vermont, have abandoned similar lawsuits, leaving California, New Jersey, Maryland, Washington, and Wisconsin as notable holdouts.
Sources:[1] "Coinbase asks regulators to clarify crypto staking policies" - CoinDesk (http://coindesk.com)[2] "Coinbase asks five states to end lawsuits over staking services" - The Block (https://www.theblockcrypto.com)[3] "Coinbase vs. SEC: A guide to the regulatory struggles" - Decrypt (https://decrypt.co)[4] "Op-Ed: The SEC’s Disappointing Enforcement Action Against Coinbase" - American Association of Individual Investors (https://www.aaII.com)[5] "Coinbase CEO Brian Armstrong Responds to SEC Suit" - Coinspeaker (https://coinspeaker.com)
- Coinbase, a leading public crypto exchange, says staking services contribute to passive income, but ongoing lawsuits in California, New Jersey, Maryland, Washington, and Wisconsin create confusion and harm consumers.
- The lawsuits claim Coinbase's staking services equate to unregistered securities offerings, a stance Coinbase opposes, asserting staking doesn't fit the definition of securities.
- Staking services are also offered by Kraken and Binance.US, and their availability can differ by state, unlike the legal challenges specifically targeting Coinbase.
- Oregon recently sued Coinbase, alleging the company failed to protect consumers from unregistered and risky cryptocurrencies and breached Oregon's securities laws.
- Coinbase's chief legal officer, Paul Grewal, accused Oregon's lawsuit of being a "copycat" of the SEC's actions and rehashing arguments the federal agency previously abandoned.
- In a significant move, the SEC dropped its staking case against Coinbase in February 2025, and five other states have abandoned similar lawsuits, leaving California, New Jersey, Maryland, Washington, and Wisconsin as notable holdouts.
- By 2023, the ongoing lawsuits have resulted in a significant loss for consumers in these states, depriving them of over $90 million in estimated staking rewards since June 2023.
- Businesses in the technology and finance sector are closely watching this development, as the outcome could impact the crypto industry's future and set a precedent for other states' regulations on crypto business practices.
