Illinois Set to Drop Charges Against Coinbase in Staking Case

Illinois had originally pursued legal action over Coinbase’s staking service, alleging it functioned as an unregistered securities offering due to the yield users earned by locking tokens.

But now, like the SEC’s softening stance, the state is preparing to withdraw its claims—a development that could reshape how U.S. regulators approach staking. 

The federal government dropped its case weeks ago, pointing to a shift in how it approaches digital assets.

Now Illinois joins the ranks of Vermont, South Carolina, and Kentucky—becoming the fourth state to halt legal action against Coinbase in just a month.

This growing wave underscores a wider move toward regulatory clarity and industry support, as the U.S. rethinks its stance on crypto.

The legal pressure on Coinbase intensified in 2023, when several U.S. states initiated lawsuits following the SEC’s accusation that the exchange had violated federal securities laws.

However, by February 2025, the SEC formally withdrew its case, a pivotal move that directly influenced subsequent decisions by state-level authorities.

I look forward to the SEC being reformed under Paul Atkins, Mark Uyeda, Hester Peirce, and DOGE, and new more sensible personnel coming into leadership roles. I commend the new leadership that is already in place for working to right this wrong – it's a great step in the right direction, and took courage,

stated Coinbase CEO Brian Armstrong in response to the SEC’s withdrawal.

The shift in regulatory tone isn’t limited to courtroom retreats. In Illinois, some legislators are now exploring a more forward-looking idea: the creation of a Bitcoin reserve—a public treasury anchored in the long-term value of the first cryptocurrency.

Yes, really. A state-level HODL.

Check this out: Fiat Money vs Commodity Money: What’s the Difference?

Where the Fight Still Burns

While some states are retreating, others continue to press forward with their cases against Coinbase. Among them: 

• Alabama;
• California;
• Maryland;
• New Jersey;
• Washington;
• Wisconsin.

The rift has sparked broader questions about the shape and scope of crypto governance in the U.S.—particularly the uneasy balance between state autonomy and national consistency.

In response, Coinbase is championing a federal approach: a clear, unified regulatory framework that would apply across all 50 states. Such legislation, they argue, could end the tide of legal ambiguity and spare the industry from the churn of state-by-state litigation.

For years, Coinbase has urged lawmakers to embrace a unified legal framework for crypto—a single set of standards to bring coherence to a fragmented system.

But progress has been slow. Opposition from senators, congressmembers, and regulators favoring tighter restrictions has kept reform at bay.

That may be changing. Across the industry, support for federal clarity is swelling—suggesting that alignment may soon shift from hope to policy.

Read on: Former New York Governor Advised OKX During Federal Probe