US state Vermont has dropped its “show cause order” against crypto exchange Coinbase for allegedly offering unregistered securities to users through a staking service.

Vermont’s Department of Financial Regulation said in a March 13 order that in light of the US Securities and Exchange Commission tossing out its case on Feb. 28, it would follow suit and rescind its action against Coinbase without prejudice.

“The SEC has announced the formation of a new task force to, among other things, provide guidance for the promulgation of rules regarding the regulation of cryptocurrency products and services,” the department said.

Vermont’s financial regulator has decided to drop its legal action against Coinbase. Source: Vermont’s Department of Financial Regulation

“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.”

On the same day the SEC filed its lawsuit in June 2023, the US states of Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington and Wisconsin said they were launching legal proceedings against Coinbase.

The show cause order asserted that Coinbase was violating securities laws by offering staking to its users without a license and demanded the exchange provide a reason why the courts shouldn’t hit them with an order directing them to halt the service. 

Now that Vermont has opted out, Coinbase chief legal officer Paul Grewal said in a March 13 statement to X that the other states with staking actions should take a “page from Vermont’s playbook.”

Source: Paul Grewal

“As we have always said: staking services are not securities. We applaud Vermont for embracing progress and providing clarity for its citizens who own digital assets,” he said.

“Our work isn’t over. Congress must seize the bipartisan momentum we’re seeing across the House and Senate to pass comprehensive legislation that takes into account the novel features of digital assets, such as staking,” he added.

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A growing number of firms facing legal action from the SEC have had their cases dismissed in the wake of former SEC Chair Gary Gensler, who took a hardline stance toward crypto, resigning on Jan. 20.

Crypto trading firm Cumberland DRW was among the latest to have its case dropped on March 4, while the regulator is reportedly wrapping up its enforcement action against Ripple Labs after more than four years.

Grewal has also launched a request under the Freedom of Information Act to find out how many enforcement actions were brought against crypto firms under Gensler’s tenure between April 17, 2021, and Jan. 20, 2025, and the cost to the taxpayer. 

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Ethereum core developers have decided to create a third testnet, Hoodi, to better prepare for the Pectra upgrade, which has now been delayed until at least late April after the first two testnets encountered several bugs.

The Hoodi testnet will launch on March 17 and the Pectra upgrade for it will be activated on March 26, Ethereum Foundation developer Tim Beiko said following the Ethereum All Core Dev Call on March 13.

If Pectra runs smoothly on Hoodi without major issues, core developers could set a mainnet launch date for Pectra as soon as 30 days after Hoodi’s activation, Beiko said.

That would mean Pectra could go live on Ethereum mainnet as early as April 25.

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Pectra, which combines features from the Prague and Electra proposals, will implement over 10 Ethereum Improvement Proposals mostly aimed at bringing more functionality to Ethereum wallets and improving user experience.

It will also include scaling proposals to double the blob count for data availability from three to six.

Pectra was initially slated to launch on Ethereum mainnet in late 2024 but has faced repeated delays due to client readiness issues and synchronization bugs in the first two Ethereum testnets, Holesky and Sepolia.

Pectra was rolled out on Sepolia on March 5, but soon after, Ethereum developers started seeing error messages on their geth nodes and empty blocks being mined.

Galaxy Digital vice president of research Christine Kim said Hoodi would look to “mimic” the Ethereum mainnet as closely as possible by launching a validator set similar to how mainnet currently operates.

That would see at least 20 million test staked-Ether (ETH) distributed across 11 client teams and five staking operators.

Source: Christine Kim

Beiko noted that aspects of Pectra may still be tested on Sepolia and Holesky.

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The third testnet comes as Ethereum core developers agreed to deploy future Ethereum protocol upgrades at a faster cadence during an “All Core Devs” meeting on Feb. 13.

Crypto-focused venture capital firm Paradigm also called on Ethereum core developers to ship faster protocol updates to achieve more milestones on its technical roadmap and maintain its competitive edge as a leading layer 1 blockchain.

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The upcoming launch of Solana (SOL) futures on the Chicago Mercantile Exchange (CME), a US derivatives exchange, signals that the first US SOL exchange-traded fund (ETF) listings are coming soon, Chris Chung, founder of Solana-based swap platform Titan, told Cointelegraph. 

On March 17, CME is preparing to launch SOL futures contracts. They will be among the first regulated Solana futures to hit the US market after Coinbase’s launched in February. 

The listing “paves the way for the eventual approval of SOL ETFs,” Chung told Cointelegraph.

Chung said he expects the US Securities and Exchange Commission (SEC) to approve asset managers VanEck and Canary Capital’s proposed spot Solana ETFs as soon as May.

The existence of regulated Solana futures “signals to regulators that Solana is maturing as an asset, making it easier for them to greenlight additional financial products of similar risk and type,” Chung said. 

Futures contracts are standardized agreements to buy or sell an underlying asset at a future date. They play a crucial supporting role for spot cryptocurrency ETFs because regulated futures markets provide a stable benchmark for measuring a digital asset’s performance.

CME already lists futures contracts for Bitcoin (BTC) and Ether (ETH). US regulators approved ETFs for both of those cryptocurrencies last year. 

CME already lists crypto futures, including Bitcoin contracts. Source: CME

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Beyond memecoins

Additionally, Solana futures and ETFs will help expand Solana’s growth story beyond memecoins, which were central to the blockchain network’s success in 2024, Chung said.

These products “will bring more serious, sticky capital and pave the way for the development of other real-world use cases, such as payments and remittances,” according to Chung. 

Those use cases are “[f]ar more boring than memecoins, perhaps, but a reliable source of long-term revenue that will buoy Solana’s price in the next bear market.”

Memecoin trading, largely tied to the popular Pump.fun platform, comprises roughly 80% of the Solana blockchain network’s revenues, according to asset manager VanEck.

However, activity on the Solana network declined in February after a series of memecoin-related scandals soured sentiment among retail traders. 

Solana vs. Ethereum price chart. Source: TradingView

Rivaling Ethereum

Still, cryptocurrency trading volumes on Solana continue to rival those of the entire Ethereum ecosystem, including its layer-2 scaling chains, VanEck said on March 6. 

Chung said he expects Solana ETFs to take off among retail investors, partly because of the challenges facing rival smart contract platform Ethereum. 

Solana’s native SOL token has performed about twice as well as Ether since early 2024, according to TradingView. 

Ethereum’s spot price has struggled since March 2024, when the network’s Dencun upgrade cut transaction fees by approximately 95%. 

“With the extremely weak price action we’re seeing in ETH, Solana is now the only option for retail investors wanting to get exposure to crypto beyond Bitcoin, but not willing to go full degen,” Chung said.

Bloomberg Intelligence has set the odds of the SEC approving spot Solana and Litecoin ETFs at 70%.

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