New Jersey Regulator Rescinds Coinbase Staking Order and $5 Million Penalty

The securities regulator in New Jersey has pulled the 2023 cease-and-desist order that stopped Coinbase from offering staking to new customers there, closing out a three-year standoff that is estimated to have cost residents $15 million in forgone rewards.

A notice from the Bureau of Securities, dated Oct. 30 and signed by Acting Bureau Chief Keith A. Alt, lifts both the order and the accompanying $5 million penalty. The retreat comes without prejudice and carries no ruling on the merits.

Coinbase made the development public in its third-quarter report to the Securities and Exchange Commission, in which it says the regulator told the company on Oct. 29 that it meant to rescind.

Brian Armstrong, the exchange's chief executive, said New Jersey users would get staking access back “very soon.”

By Monday the exchange's eligibility page still listed New Jersey among the places where customers cannot stake new principal, and no reopening date has been given.

Where the staking case came from

The order dates to June 6, 2023, when the New Jersey bureau took part in a coordinated action against Coinbase's staking program alongside securities regulators from nine other states: Alabama, California, Illinois, Kentucky, Maryland, South Carolina, Vermont, Washington and Wisconsin.

Those states argued the service amounted to an unregistered securities offering under their own laws.

California headed the task force, and its action covered more than 600,000 accounts. In July 2023, Coinbase reached agreement with California, New Jersey, South Carolina and Wisconsin to keep customers in those states from staking new funds until a final adjudication. Maryland struck a comparable agreement in October 2023.

Anyone who had staked before the orders kept earning rewards, though adding principal or compounding what they received was off the table.

The state actions moved alongside the SEC's June 2023 suit against Coinbase, which listed staking among its claims. That case was dismissed in February 2025. Alabama, Kentucky, Illinois, South Carolina and Vermont dismissed, vacated or withdrew their own actions in March and April 2025. Of the original ten states, New Jersey is the sixth to pull back.

What the withdrawal changes, and what it leaves open

Lifting the order ends the restriction on new staking in New Jersey, but the legal question underneath stays open. The bureau made no finding on whether Coinbase's staking program is a security, and because the language is “without prejudice” the regulator keeps the option of filing a fresh action. Coinbase's own filing calls the state matters “preliminary” and says an adverse resolution “could have a material impact” on the business.

What the filing describes is a rescission still to come rather than one already completed, which accounts for the distance between Armstrong's statement and the unchanged eligibility page. For New Jersey residents the change arrives when Coinbase updates its systems, not when the notice was signed.

Coinbase has cast the state restrictions as a competitive disadvantage. In an April 2025 post, the company's Ryan VanGrack argued the orders singled out one provider even though residents could stake through other platforms. As of October 2025, Coinbase put forgone rewards across the four restricted states at more than $130 million.

Four states remain. California, Maryland and Wisconsin still bar new staking on Coinbase while their cases proceed, and Washington, where staking is permitted, is pursuing a $4 million fine. Coinbase estimates California residents have missed more than $89 million in rewards since 2023.

The decision lands as federal policy has shifted without settling. The SEC has withdrawn from the registration-based cases it brought in 2023, and the CLARITY market structure bill passed the House in 2025 but stalled in the Senate. State securities regulators are not bound by the SEC's enforcement priorities, which is why the staking cases outlived the federal one by more than a year and a half.

A future SEC, or a future bureau chief in Trenton, could revisit the question.