New Jersey’s Bureau of Securities has withdrawn its 2023 order against Coinbase’s staking service, removing a ban that had prevented residents from staking new funds on the exchange and wiping out a $5 million penalty tied to the case.
The rescission was signed on October 30 by Acting Bureau Chief Keith A. Alt. The order does not decide whether Coinbase’s staking program violated state law, and it was issued without prejudice, meaning New Jersey could still bring a new enforcement action later.
A three-year dispute is lifted, but not resolved
New Jersey moved against Coinbase in June 2023, when the state’s securities regulator said the exchange’s staking service was an unregistered security. Staking generally involves locking up tokens such as Ethereum or Solana to help support a blockchain network in exchange for newly issued tokens, with Coinbase taking a share for providing the service.
At the time of the state’s action, 145,270 New Jersey residents were using Coinbase staking, according to the state Attorney General’s office. Coinbase halted staking in four states in the weeks that followed.
Coinbase says users lost rewards during the ban
Coinbase Chief Legal Officer Molly Abraham said New Jersey customers missed out on millions of dollars in staking rewards during the three years the restriction was in place. Earlier, in April 2025, Coinbase had estimated that missed rewards across affected states totaled $90 million.
The latest order removes the immediate legal and financial consequences of the New Jersey case, but its language leaves the underlying legal question unsettled. Because the rescission was issued without prejudice, the bureau preserved its ability to pursue the matter again in the future.
Why the case matters to Coinbase’s business
The New Jersey reversal came as staking-related income has become a closer focus for Coinbase and its investors. In its quarterly filing dated October 29, the company said blockchain rewards, mostly from staking, brought in $85.7 million in the third quarter, down sharply from $184.6 million in the same period a year earlier.
Coinbase attributed $111.8 million of that decline to lower prices for Solana and Ethereum, while lower reward rates reduced revenue by another $18.9 million. The same filing was also the first place the company disclosed New Jersey’s plan to rescind the order, and it warned that losing the remaining state cases could materially harm the business.
State cases remain in several jurisdictions
Pressure on Coinbase’s staking business had already eased at the federal level before New Jersey stepped back. The SEC agreed in February 2025 to drop its lawsuit against the company, and in May 2025 SEC staff said protocol staking generally does not involve securities. That staff view is not binding, and Commissioner Caroline Crenshaw publicly disagreed.
At the state level, Alabama, Illinois, Kentucky, South Carolina, and Vermont dropped their cases in 2025, according to Coinbase’s filing. However, California, Maryland, and Wisconsin still have agreements in place that bar new staking, and Washington’s enforcement action remains open.
What comes next
The immediate next step is in the remaining state proceedings. Based on the company’s latest disclosure, Wisconsin, Maryland, California, and Washington are now the main jurisdictions still keeping the issue active.
New Jersey’s retreat narrows the dispute but does not close it entirely. Federal regulators have largely stepped back from staking for now, while several states still have live restrictions or open actions. Even in New Jersey, the bureau’s order makes clear that future enforcement remains possible.
Source: beincrypto.com