Laravel API returns 401 even while logging in succeeds

For me, it turned out the stateful property in config/sanctum.php was not filled correctly.

After setting it to the default as shown below, it started working.

// file config/sanctum.php
...
    'stateful' => explode(',', env('SANCTUM_STATEFUL_DOMAINS', sprintf(
        '%s%s',
        'localhost,localhost:3000,127.0.0.1,127.0.0.1:8000,::1',
        Sanctum::currentApplicationUrlWithPort()
    ))),
...

Did this not fix your problem?

Check this post which might help: https://stackoverflow.com/a/69858100