New Jersey Clears Coinbase Staking Hurdle, Questions Remain

TLDR

• New Jersey has withdrawn its 2023 Coinbase staking order and the associated $5 million penalty.
• The state regulator rescinded the order on October 30 without deciding whether Coinbase violated securities law.
• Coinbase estimates New Jersey residents missed more than $15 million in staking rewards during the restrictions.
• Coinbase CEO Brian Armstrong said staking access would return soon, although the exchange has not announced a reopening date.
• Existing Coinbase customers in New Jersey could continue earning staking rewards but could not add new funds.

New Jersey has withdrawn its 2023 order against Coinbase staking, clearing a path for residents to add crypto to the service after more than three years. The state also rescinded a $5 million penalty.

The October 30 notice, signed by Acting Bureau Chief Keith A. Alt, made no finding on whether the staking program broke securities law. Coinbase estimates New Jersey residents missed over $15 million in rewards.

New Jersey Withdraws Coinbase Staking Order

Coinbase said in its third-quarter filing that the state notified it on October 29 of plans to rescind the order. Chief Executive Brian Armstrong said access would return “very soon.”

However, Coinbase’s eligibility page still lists New Jersey among states where customers cannot stake new funds. The exchange has not announced a reopening date. Existing stakers can keep earning rewards.

How the 2023 Restrictions Worked

New Jersey joined nine other states on June 6, 2023, in alleging that Coinbase offered unregistered securities through staking. Coinbase disputed the claim. Staking is among the ways crypto exchanges earn revenue through service fees.

That July, Coinbase agreed to restrict new staking in California, New Jersey, South Carolina and Wisconsin. Maryland reached a similar agreement in October. Those restrictions remained while the state cases continued.

Customers with existing staked assets could keep earning rewards but could not add more funds or reinvest their earnings. Users could also withdraw their crypto, although they could not stake it again.

Other States Continue Staking Cases

A recent study found staking and mining income fell 37% across the wider blockchain industry in the first half of 2026. The figure did not refer specifically to Coinbase.

Alabama, Kentucky, Illinois, South Carolina and Vermont ended their cases in 2025. California, Maryland and Wisconsin still restrict new staking. Washington allows staking but continues to pursue a $4 million penalty. Coinbase also estimates California residents have missed over $89 million in potential rewards since the restrictions began.

No Final Ruling on Staking Law

New Jersey withdrew its order “without prejudice.” That means the bureau can bring another action later. The notice did not decide whether Coinbase staking falls under state securities rules.

The SEC dismissed its separate Coinbase lawsuit in February 2025. Congress has not passed the CLARITY market structure bill. A fresh debate over the CLARITY Act this week centered on crypto oversight following the Binance hack. Coinbase warned in its filing that adverse rulings in remaining state cases could affect its business.

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