Vermont Follows SEC Move, Drops Lawsuit Against Coinbase

The US state of Vermont has finally dropped its two-year lawsuit against Brian Armstrong-led Coinbase. This move marks a significant win for the American cryptocurrency exchange, which has faced several regulatory difficulties in its crypto services. 

US States Hit Coinbase With Multiple Lawsuits 

Noteworthy, Vermont is one of the 10 US states that sued Coinbase in 2023 for allegedly offering unregistered securities in their region. 

The others are Kentucky, California, South Carolina, Illinois, Maryland, Wisconsin, Alabama, New Jersey, and Washington. In a March 13 order, authorities in the region changed their minds and decided it was best to forgo the case. 

Vermont’s Department of Financial Regulation took this decision in light of the US Securities and Exchange Commission’s (SEC) earlier move.

“In light of the dismissal of the Federal Action and likelihood of new federal regulatory guidance, the Division believes it would be most efficient and in the best interests of justice to rescind the pending Show Cause Order, without prejudice,” the department wrote.

SEC Drops Litigation Against Coinbase; Launch Crypto Task Force 

For more context, the SEC first hinted at its intention to drop its lawsuit against Coinbase just one month after Donald Trump became the President of the United States (POTUS) in January 2025. 

The crypto exchange had argued that the agency had failed to provide clear rules for digital asset firms in the country. Though it was unclear what the SEC’s next line of action would be, it still tossed out its case against Coinbase on February 28.

The agency now has a crypto task force to guide the establishment of robust crypto regulatory frameworks. This task force, formed under Mark Uyeda’s administration as interim SEC Chair, is also responsible for setting “the SEC on a sensible regulatory path.” This leaves behind the regulation-by-enforcement approach previously utilized by the Commission. 

What Else Is the SEC Doing About Crypto Regulation?

The Commission is close to withdrawing a controversial proposal that would have forced certain crypto firms to register as exchanges. 

Speaking at the Washington Conference of the Institute of International Bankers, Uyeda confirmed that SEC staff are exploring options for abandoning the rule. If this is achieved, crypto firms stand to benefit greatly.