New Jersey Drops Coinbase Staking Ban and $5 Million Penalty

New Jersey Rescinds Its 2023 Staking Order

The New Jersey Bureau of Securities has rescinded the cease-and-desist order it issued in 2023 against Coinbase Global, erasing a $5 million penalty and ending a ban that stopped residents from staking new funds on the exchange. The rescission took effect on October 30 and carries the signature of Acting Bureau Chief Keith A. Alt. It was issued without prejudice, so the bureau can still open a fresh case, and the order makes no ruling on whether staking broke state securities law. The document also reserves the bureau's right to bring future enforcement action against the company. The penalty figure had formed part of the original action's demands; the rescission removes it outright. A cease-and-desist order directs a firm to halt an activity a regulator deems unlawful, and New Jersey's had been in force since June 2023. Staking means locking coins such as Ethereum (ETH) or Solana (SOL) to help run a blockchain in return for newly issued tokens; Coinbase operates the program for customers and keeps a share of the rewards. The bureau classified that service as an unregistered security in June 2023, citing staking offerings it said violated state securities law, per the state Attorney General's announcement. At the time, 145,270 New Jersey residents were using the program. Coinbase suspended staking in four states weeks after the filing. Chief Legal Officer Molly Abraham said the state's users missed millions of dollars in rewards over more than three years of restrictions. In a post on X on Monday, she confirmed the lawsuit is formally dropped and the order lifted, clearing New Jersey users to resume staking. The company estimated in April 2025 that missed rewards across all restricted states had reached $90 million.

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Four States Still Bar New Staking

The federal dispute ended first. A regulatory filing by the company shows the U.S. Securities and Exchange Commission (SEC) agreed in February 2025 to drop its lawsuit against Coinbase. In May 2025, SEC staff said protocol staking, the direct delegation of tokens to help validate a network, generally does not involve securities. The staff statement covered staking performed directly through a blockchain's protocol, a narrower scope than the Coinbase-run program the states had targeted. The staff framed its view as non-binding, and Commissioner Caroline Crenshaw publicly disagreed with the position. The SEC's retreat did not bind state regulators, which enforce their own securities rules and set their own timetables. Alabama, Illinois, Kentucky, South Carolina and Vermont dropped their cases during 2025, the filing shows. California, Maryland and Wisconsin still hold agreements barring new staking, and Washington's action remains open, so the crypto exchange cannot accept new staking funds in those four jurisdictions. Before this week, those agreements plus New Jersey's order left five open state restrictions; the rescission cuts that count to four. Abraham named all four in her post: “Wisconsin, Maryland, California, and Washington are next.” The company's quarterly filing, dated October 29, first disclosed New Jersey's plan to rescind its order. The same document warned that losing the remaining state cases could materially hurt the business. For New Jersey users, the practical effect is immediate: the state no longer restricts staking on the platform, and the company has said residents can stake again.

The rescission lands as staking has become a smaller line item for Coinbase. Its quarterly filing shows blockchain rewards, mostly from staking, brought in $85.7 million in the third quarter, down from $184.6 million a year earlier. The company attributed $111.8 million of that decline to lower Solana and Ethereum prices and another $18.9 million to reduced reward rates, so the drop traced to market conditions rather than to the state bans alone. Shares of Coinbase (COIN) regain access to a market of roughly 145,000 staking users, though the without-prejudice clause keeps re-litigation open in New Jersey. Our reading: the legal overhang narrows rather than closes. Three state agreements and Washington's open case still block new staking, and the filing's own material-harm warning on those jurisdictions stands. How many of the four follow New Jersey will decide how much of the lost rewards business returns.