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Kentucky has followed in the footsteps of Vermont and South Carolina by dismissing its lawsuit against Coinbase over crypto staking services. This decision comes in the wake of new legislation aimed at protecting digital assets and their rights.
On Monday, the Kentucky Department of Financial Institutions filed a joint stipulation of dismissal, effectively ending the legal action taken against the cryptocurrency exchange’s staking program. This development marks another victory for Coinbase in its battle against regulatory hurdles.
The dismissal follows the passage of House Bill 701 by Kentucky lawmakers. This bipartisan legislation serves to protect various crypto activities beyond mere staking. Crucially, it affirms that self-custody of cryptocurrencies is legal and safeguards node operators from certain regulations. Furthermore, it exempts staking rewards from state money transmitter rules.
As a result of the dismissals, Coinbase has emerged victorious against regulators in multiple states. Notably, Vermont and South Carolina have also dropped their respective lawsuits against the exchange over its staking services.
Coinbase’s Chief Legal Officer, Mark Uyeda, expressed his gratitude for the swift action taken by Kentucky lawmakers. He emphasized the need for a federal approach to cryptocurrency regulation, stating that Congress should “end this litigation-driven, state-by-state approach with a federal market structure law ASAP.”
Despite these recent victories, Coinbase still faces pending enforcement actions in seven other states. California, New Jersey, Illinois, Washington, Alabama, Maryland, and Wisconsin continue to maintain legal actions against the exchange.
In response to the ongoing regulatory uncertainty, Coinbase has been actively pursuing international expansion opportunities. It recently re-entered the Indian market after a brief exit in 2023. Additionally, it is exploring the acquisition of Deribit, which would further diversify its operations beyond US borders.
The Kentucky legislation underscores a growing trend toward crypto-friendliness within certain states. Lawmakers have introduced separate proposals to allocate up to 10% of their excess reserves into Bitcoin, solidifying Kentucky’s stance as a welcoming jurisdiction for digital assets.
Source: https://blockonomi.com/kentucky-dismisses-lawsuit-against-coinbase-following-new-crypto-legislation/
