As of March 2023, Coinbase's staking program boasted nearly 3.5 million accounts nationwide, holding approximately $4.8 billion in assets, including $37.7 million from South Carolina accounts that were not federally insured.

South Carolina Attorney General Alan Wilson has lifted a previous order that prohibited Coinbase, the largest cryptocurrency platform in the U.S., from operating its staking rewards program in the state.

Despite the dismissal of the order, Wilson's office clarified that it does not indicate any position on the merits of the case or other ongoing legal matters.

Wilson's action against Coinbase was part of a broader initiative involving nine states, with Vermont recently retracting its order following the dismissal of the SEC case.

Coinbase asserts that no users have lost assets through its services and estimates that the order cost South Carolinians at least $2 million in missed earnings.

This decision comes on the heels of a recent agreement between the U.S. Securities and Exchange Commission (SEC) and Coinbase to dismiss a broader federal case that accused Coinbase of functioning as an unregistered national securities exchange, broker, and clearing agency.

The SEC's lawsuit had raised concerns about Coinbase's failure to register, which denied investors essential protections such as inspections and safeguards against conflicts of interest.

Previously, the order against Coinbase claimed that the platform was selling unregistered securities and warned that over 43,000 accounts in South Carolina were at risk of losses due to the lack of federal insurance for the staking program.

Coinbase's Chief Legal Officer Paul Grewal hailed the dismissal as a significant victory for consumer protection and financial opportunity, highlighting the advantages of staking in cryptocurrency.

SEC Acting Chairman Mark T. Uyeda has criticized the agency's previous approach to cryptocurrency and announced the formation of a Crypto Task Force aimed at establishing a clearer regulatory framework.

The company argues that the assets involved in its staking program do not qualify as securities under federal law, allowing customers to maintain ownership of their assets.