The financial regulatory department of the State of Vermont has dropped its legal proceeding against Coinbase, citing a shift in the regulatory climate.
Following the US Securities and Exchange Commission’s (SEC) path, the State of Vermont has tossed its Show Cause Order against Coinbase, the largest crypto exchange in the United States. In a statement yesterday, the state’s Department of Financial Regulation dismissed the case without prejudice.
The State of Vermont cited a shifting regulatory tone in the United States as the cause for the case rescission. The American state noted that it followed the SEC’s decision to dismiss its case against Coinbase amid ongoing reforms on crypto regulation.
Another Coinbase Win
For context, on June 6, 2023, Vermont sued Coinbase for offering staking services to its residents, deemed unregistered securities, without due licensing. The Show Cause Order sought to halt the exchange’s crypto-staking offering, citing a violation of the federal securities laws.
The Vermont Department of Financial Regulation brought this case against Coinbase the same day the US SEC sued the exchange for allegedly selling unregistered securities to US investors. Notably, other states, including Kentucky, California, Washington, New Jersey, and Alabama, brought a similar legal action against the crypto exchange.
However, the US SEC officially dropped its case against Coinbase on February 28 as part of its efforts to create regulatory clarity in the US. The ripple effect forced Vermont to announce yesterday that it has followed in the path of the Wall Street top regulator.
“In light of the dismissal of the Federal Action and likelihood of new federal regulatory guidance, the Division believes it would be most effective and in the best interest of justice to rescind the pending Show Cause Order, without prejudice,” the Thursday order disclosed.
Moreover, the US SEC has recently dropped legal actions against multiple crypto firms. Robinhood, OpenSea, and Kraken, among others, have seen their cases and investigations tossed by the regulator.
The Work Is Not Over Yet: Coinbase
Paul Grewal, Coinbase’s chief legal officer (CLO), confirmed this development, applauding Vermont’s effort to comply with ongoing regulatory reform. In a tweet, he urged other states with staking actions against the exchange to follow the Northeastern state’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
Meanwhile, Grewal insisted that staking services are not securities. Furthermore, the CLO stated that the work to bring regulatory clarity to America remains, and nudged Congress to seize the bipartisan crypto-friendly environment in the House and Senate to establish a digital asset legal framework.
Notably, Coinbase has been at the forefront of this clarity push in the US, suing the SEC at one time for failing to respond to its request to create a legal framework for the industry. Also, its recent letter to the Office of the Comptroller of the Currency (OCC) and other federal banking regulators catalyzed a correspondence clearing banks to meddle with digital assets.
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