Illinois to Drop Coinbase Staking Lawsuit Amid Regulatory Retreat

Illinois is preparing to drop its lawsuit against Coinbase over its crypto staking program, joining a growing list of U.S. states backing away from legal action against the crypto exchange. A spokesperson for Illinois Secretary of State Alexi Giannoulias confirmed the decision, although no specific timeline was provided for when the case will be officially withdrawn.

In 2023, Illinois was among 10 states that filed charges accusing Coinbase of violating state securities laws through its staking services. The lawsuits coincided with federal charges from the U.S. Securities and Exchange Commission (SEC), which claimed Coinbase’s staking product constituted an unregistered securities offering. However, the SEC dropped its case in February 2025, sparking a ripple effect among state regulators.

Following the SEC’s move, Kentucky, Vermont, and South Carolina have all quietly dropped their own staking-related lawsuits. Illinois is now set to follow suit, signaling a broader regulatory shift in how staking is viewed in the U.S.

Despite this trend, six states—Alabama, California, Maryland, New Jersey, Washington, and Wisconsin—continue to pursue litigation. New Jersey’s Bureau of Securities confirmed its case is still open, while Washington’s securities administrator Bill Beatty stated their proceedings remain ongoing. California, Maryland, and Wisconsin declined to comment, and the Alabama Securities Commission has yet to respond.

Coinbase’s staking program, which allows users to earn rewards by locking up crypto assets, has faced intense scrutiny over whether such services fall under securities regulation. The ongoing rollback of lawsuits could indicate changing perspectives on crypto regulation at both state and federal levels.

As Coinbase continues to fight legal battles across the country, the retreat of multiple states could be seen as a significant win for the crypto industry—and a sign of evolving regulatory clarity.