Coinbase CLO Calls Out 5 U.S. States for Ignoring CLARITY’s Crypto Staking Regulations—Here’s Why It Matters

Coinbase’s Chief Legal Officer just dropped a bombshell—five U.S. states are blatantly sidestepping federal crypto staking rules. Here’s what’s at stake.

### The Regulatory Showdown No One Saw Coming

While Wall Street plays catch-up with blockchain, state regulators are apparently writing their own rulebook. The CLARITY Act was supposed to standardize crypto staking—but guess who didn’t get the memo?

### Why This Fight Isn’t Just Legal Theater

Staking isn’t some niche DeFi feature anymore—it’s the backbone of Ethereum’s $40B+ market. When states go rogue, they’re not just bucking rules; they’re risking fragmentation of the entire U.S. crypto landscape. Cue the institutional investors clutching their pearls.

### The Cynical Take

Nothing unites bureaucrats like the chance to create redundant regulations—unless it’s the opportunity to miss out on the next financial revolution. Meanwhile, Coinbase’s stock dips while their legal team does the SEC’s job for them. Classic 2025.

Coinbase CLO Paul Grewal is making his frustration clear.

In a direct post on X, he called out five U.S. states for pushing forward with legal action against crypto staking, even after Congress passed a bill that says staking-as-a-service is not a security.

“I gotta call out one critical provision of CLARITY Act that hasn’t received the attention it is due: staking-as-a-service is confirmed as a non-security and rule-making is ordered,” Grewal wrote.

The law he’s referring to is the, which passed the House last month with strong bipartisan support. It clearly states that staking services offered by crypto platforms should not be treated as securities, which is a big deal for the industry.

Five States Under Fire

Despite that clarity, California, New Jersey, Washington, Maryland, and Wisconsin are still pursuing claims against Coinbase over its staking services. Grewal says these actions directly ignore the law and what’s more, he points out that 32 Democratic lawmakers from those same states actually voted for the CLARITY Act.

That contradiction is what’s fueling frustration. According to Grewal, these state regulators are acting as if the bill never passed

5 states (CA, NJ, WA, MD, and WI) that refuse to acknowledge this insist on pursuing baseless claims against us and these services. But 32 Congressional Democrats from these states alone voted for this bill, underscoring that the state agencies pursuing these cases are deeply at… pic.twitter.com/tF019kfpr9

This Patchwork Approach Can’t Continue

The bigger issue, Grewal explains, is the ongoing lack of coordination between state and federal regulators. While Congress is pushing forward with clearer crypto rules, some states are still using outdated or unclear laws to take enforcement action.

“It’s time to end this patchwork of state regulation by enforcement and align with Congress on clear, bipartisan crypto rules,” Grewal said, adding that he hopes the Senate will MOVE quickly to finish what the House started.

Coinbase Steps Up Lobbying

This statement comes as Coinbase intensifies its efforts in Washington. The exchange recently brought in David Plouffe, a former adviser to Kamala Harris and Barack Obama, to join its advisory board. The goal: influence key lawmakers and push for fair crypto regulation.

Coinbase has long called for clear rules. With the CLARITY and GENIUS Acts gaining momentum, the platform is now urging lawmakers to finish the job, especially when it comes to staking.

What’s Next for Staking?

The CLARITY Act gives staking services some long-awaited relief. But until the Senate acts, and until state regulators get on the same page, the legal battles may continue.

What Grewal wants for now is that regulators respect what Congress has already decided.