The Alabama Securities Commission (ASC) dropped litigation against cryptocurrency exchange Coinbase on Wednesday.
The ASC filed a show cause order in June 2023, alleging that Coinbase violated securities law by offering its staking rewards program accounts to Alabama residents without registration to offer or sell these securities. Staking occurs when investors lock their crypto assets for a set period to help support the operation of a blockchain. In return, the investor is promised more crypto assets.
ASC director Amanda Senn said in a statement to 1819 News on Friday, "We merely recognized that we may be able to accomplish what we want without the time and expense of litigation. Some states had already expended significant resources toward litigation and were much further down the road. We were operating under a show cause order, not a cease and desist, and had been engaging in discussions. Had we been further down the road, we may have proceeded."
"In the interim, however, two important working groups were formed-the President's Working Group on Digital Asset Markets and the SEC's Crypto Task Force- and we believe they will accomplish what they set out to do. By all accounts, a regulatory framework appears imminent, so it made sense for us to table our litigation posture and allow time for policy makers to continue their good work," Senn said. "Our action should not, however, be taken by anyone that we will not litigate if an appropriate regulatory scheme is not adopted. I do not approve of any player in the financial industry, operating outside of a regulatory framework. It's necessary to build investor trust and confidence, and to promote market stability and integrity."
Senn said, "The ASC had the opportunity to host SEC Commissioner Mark Uyeda here in Montgomery a few years ago (in 2023). I have the utmost confidence in his ability, along with SEC Chair Atkins and the Commission, to determine the best course forward for the crypto industry."
CO-2023-0009 COINBASE by Caleb Taylor on Scribd
State Rep. Mike Shaw (R-Hoover) told 1819 News he was glad Alabama was dropping the litigation against Coinbase. Shaw filed legislation this session to allow the Alabama State Treasurer to invest in cryptocurrencies and other digital assets.
"I'm really glad to see it. We all know the Trump administration has taken up a positive stance on crypto and kind of reversed things some of the Biden administration has done. I'm glad to see the states following suit and I'm glad Alabama is doing the same," Shaw said.
To connect with the author of this story or to comment, email [email protected].
Don't miss out! Subscribe to our newsletter and get our top stories every weekday morning.
