Alabama Becomes 5th State to Drop Coinbase Lawsuit

Alabama was the fifth state to withdraw from a coordinated legal effort targeting Coinbase's staking services. The move happened after the SEC’s formation of a task force to develop clearer rules for the digital asset space, which could mean that there is a shift toward unified federal oversight. Despite this progress, five states still continue their legal pursuit. Coinbase is capitalizing on this regulatory momentum by expanding its US operations, and announced plans to hire 130 new employees in Charlotte, North Carolina. These employees will mostly work in compliance and customer support roles. Riot Platforms secured a $100 million Bitcoin-backed loan from Coinbase. With its large BTC treasury and ongoing investments, Riot is signaling confidence in Bitcoin’s long-term value, while Coinbase cements itself as a major player in the crypto-fintech space. States Ease Off Coinbase The Alabama Securities Commission officially dropped its lawsuit against Coinbase, which is yet another positive step in the changing relationship between US regulators and the crypto industry. The lawsuit was originally filed in June of 2023, and it accused the crypto exchange of violating securities laws by offering staking services to customers. Alabama was one of ten US states, including California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin, that collectively took legal action against Coinbase over the matter. According to an April 23 legal filing that was shared by Coinbase’s chief legal officer, Paul Grewal, Alabama referred to the US Securities and Exchange Commission’s (SECs) ongoing efforts to establish clearer regulations for the crypto industry as the reason for dropping the case. The filing pointed out that the SEC recently announced the creation of a task force tasked with guiding rule-making for the regulation of digital assets. In light of this, the Commission decided that it will be better to pause state-level enforcement while federal policymakers work toward cohesive regulatory frameworks. Alabama is the fifth state to withdraw from the coordinated legal action, after the earlier dismissals by Vermont, South Carolina, and Kentucky. Vermont was the first to withdraw its lawsuit on March 13, followed by South Carolina on March 28 and Kentucky on April 1. Despite this growing trend, five states are still pursuing litigation against Coinbase, with four of them continuing to enforce bans on staking services offered by the exchange. Paul Grewal criticized the remaining states for what he described as unnecessary use of taxpayer funds and for limiting consumer choice by restricting access to staking services. He believes that while some progress has been made, the crypto sector still faces a lot of regulatory uncertainty and a fragmented landscape that needs to be addressed through coordinated action at both the state and federal levels. Coinbase Expands to Charlotte with 130 New Jobs What does Coinbase plan on doing with its newfound freedom? The exchange is deepening its commitment to the US market with plans to hire more than 130 employees in Charlotte, North Carolina. This means that the company is making a strategic investment in one of the country’s rising fintech and financial hubs. A company spokesperson confirmed the move, and explained that the hiring drive will primarily focus on roles in Compliance and Customer Support over the next six months. The spokesperson also mentioned that Charlotte’s growing reputation as a center for financial and tech talent makes it a compelling location for Coinbase’s physical expansion. Despite this new office, Coinbase still operates as a remote-first company. It adopted this model in 2020. While most of its workforce has the flexibility to work from home or in a hybrid model, the company acknowledges that certain roles are more effectively carried out in-office. About 95% of Coinbase employees currently have the choice to work remotely, from an office, or a mix of both. The company described its approach as a deliberate strategy to engage top talent wherever it may be located. The Charlotte expansion is part of a broader hiring initiative under CEO Brian Armstrong’s leadership. In early March, Armstrong stated that Coinbase plans to hire approximately 1,000 new US-based employees this year. He attributed the hiring surge to favorable regulatory signals from President Donald Trump’s administration, which took a pro-crypto stance. The additional hires will increase Coinbase’s headcount by roughly 27%, based on the latest data showing 3,772 current employees . Coinbase employee data (Source: Stock Analysis ) Coinbase’s push into Charlotte also coincides with its consideration of applying for a US federal bank charter, which will greatly expand its regulatory footprint and capabilities. Together, the hiring spree, regional expansion, and potential for broader financial services suggest that Coinbase is positioning itself to play a much bigger role in the US crypto and financial landscape. Riot Secures $100M Bitcoin-Backed Loan from Coinbase Meanwhile, Riot Platforms recently secured a $100 million credit facility from Coinbase, by using a portion of its sizable Bitcoin holdings as collateral. This is the Bitcoin mining firm’s first Bitcoin-backed loan, and according to CEO Jason Les, the funds will support general corporate operations and strategic growth initiatives. The credit line is set to mature in one year, with an option to extend it for another year. It carries an annual interest rate tied to the federal funds rate plus 4.5%, which currently puts it above 9%. The loan is backed by Riot’s very large Bitcoin treasury, which totals 19,223 BTC. This makes the company the third-largest corporate holder of Bitcoin. At current market prices, these holdings are worth approximately $1.8 billion. At press time, Bitcoin was trading hands at $92,994 after its price managed a small 0.04% price climb over the past 24 hours. BTC was, however, still in the green by more than 10% on its weekly time frame, and by more than 7% over the past 30 days. This is according to data from CoinMarketCap . BTC’s price action over the past 24 hours (Source: CoinMarketCap ) Riot has been actively expanding its Bitcoin reserves, including a $500 million purchase in December, and recently announced a plan to raise another $500 million through a private bond offering that will be aimed at funding even more BTC acquisitions. Top 10 largest Bitcoin holding companies (Source: BitcoinTreasuries.Net ) On April 23, shares of Riot Platforms surged by over 8% as Bitcoin miners and broader markets experienced a rally. Still, the company’s stock struggled throughout the year, and fell more than 40% since Bitcoin’s post-inauguration peak. Despite market volatility, Riot closed 2024 with record earnings, and reported $376.7 million in revenue and $109.4 million in net income. The firm’s next earnings call, covering the first quarter of 2025, is scheduled for May 1.