Kentucky is the latest state to back away from its legal fight with Coinbase over the exchange’s staking rewards program. The Kentucky Department of Financial Institutions dismissed its lawsuit on April 1, joining Vermont and South Carolina in dropping similar actions.
Kentucky was one of 10 states that initially sued Coinbase in June 2023, the same day the Securities and Exchange Commission (SEC) filed its own lawsuit against the exchange. The SEC has since dropped its suit.
Coinbase chief legal officer Paul Grewal responded to Kentucky’s dismissal on X, calling on Congress to establish a federal market structure law to avoid state-by-state litigation.
Vermont was the first state to drop its suit on March 13, followed by South Carolina on March 27. Both cited the SEC’s February 27 decision to drop its case against Coinbase and the potential for revised federal guidance.
The decision from Kentucky follows Governor Andy Beshear signing a “Bitcoin Rights” bill into law on March 24. The law establishes protections for crypto self-custody and exempts crypto mining from money transmitting and securities laws.
Currently, seven states are still pursuing lawsuits against Coinbase: Alabama, California, Illinois, Maryland, New Jersey, Washington, and Wisconsin. These suits allege that Coinbase’s staking rewards program violates securities laws.