Kentucky's Department of Financial Institutions has withdrawn its lawsuit against Coinbase, but the issue of crypto regulation in the U.S. remains unresolved.
Kentucky's Lawsuit Conclusion
Kentucky is the latest state to end its legal action against Coinbase. Vermont ended its lawsuit in March, and South Carolina followed two weeks later. However, cases remain open in seven states, including Alabama, California, and New Jersey. The main dispute concerns the classification of staking services as securities subject to regulation. Coinbase insists its program does not qualify as a security.
SEC's Evolving Approach to Crypto
Lawsuits against Coinbase were part of a broader SEC crackdown. In 2023, the SEC sued the exchange, but in February 2025, it dropped the case, marking a win for the crypto industry. The SEC also withdrew lawsuits against other crypto companies, such as Robinhood and Ripple, indicating a change in the agency's stance.
Kentucky's New Crypto Law
Kentucky dropped the lawsuit shortly after Governor Andy Beshear signed the 'Bitcoin Rights' bill. This law protects self-custody of cryptocurrencies, allows digital assets for payments, and supports crypto mining.
Despite the conclusion of several cases, seven states continue legal proceedings, and issues of crypto regulation in the U.S. remain unresolved.
