New Jersey lifts Coinbase staking ban and drops $5 million penalty

New Jersey ends its three-year Coinbase staking ban

New Jersey's securities regulator has withdrawn its 2023 cease-and-desist order against Coinbase's staking service. The move lifts a ban that stopped residents of the US state from staking new funds on the exchange for more than three years.

The Oct. 30 notice, signed by Acting Bureau Chief Keith A. Alt, also withdrew the $5 million penalty tied to the order. Coinbase disclosed the change in its third-quarter filing, saying the regulator told the company on Oct. 29 that it planned to rescind the order. CEO Brian Armstrong said New Jersey users would regain staking access "very soon".

The key facts

• The Oct. 30 notice rescinded the 2023 cease-and-desist order and its $5 million penalty.
• The withdrawal was made "without prejudice" and without a ruling on the merits, meaning the Bureau of Securities can bring a new enforcement action against Coinbase in the future.
• Coinbase learned of the plan on Oct. 29, according to its third-quarter filing.
• Four states — California, Maryland, Wisconsin and Washington — are still pursuing enforcement actions against Coinbase's staking service.
• Coinbase estimates California users have missed over $89 million in staking rewards since 2023, against more than $15 million in New Jersey.

What the regulator's notice says

The notice is the primary document here. It withdraws both the order and the penalty, but the "without prejudice" wording matters: the state did not rule on whether Coinbase's staking service violated securities law. The Bureau of Securities keeps the option to act against Coinbase again.

What other reporting adds

According to Cointelegraph, California led the ten-state task force behind the 2023 actions, which covered more than 600,000 accounts held by Californians. California, Wisconsin and Maryland barred Coinbase from new staking while their cases ran, while Washington allows staking but is seeking a $4 million fine.

Cointelegraph also reports the reversal came shortly before the Nov. 3 US midterm elections, and notes it happened under Democratic Gov. Mikie Sherrill, who voted for the CLARITY and GENIUS bills as a House member.

What is confirmed and what is not

Confirmed: the order and penalty were rescinded on Oct. 30, the withdrawal was without prejudice, and Coinbase disclosed the rescission in its third-quarter filing.

Reported but not independently confirmed by this article: the exact timing of when New Jersey users regain staking access — that rests on Armstrong's "very soon" statement — and Coinbase's own estimates of missed staking rewards, which are company figures rather than verified totals.

Prediction-market expectations about the midterms are speculation, not outcomes.

Why this matters for Coinbase users in the state

Staking means committing cryptocurrency to help validate transactions and secure a blockchain in exchange for rewards. Exchanges like Coinbase run this process for customers and keep a share of the rewards as a fee. For New Jersey residents, the rescission means they can put new funds into staking on Coinbase again, ending a restriction in place since 2023. For Coinbase, it removes one of several state-level actions against its staking business, though four states still have active cases.

What happens next

New Jersey users are expected to regain staking access soon, per Coinbase's statement. The ongoing enforcement actions in California, Maryland, Wisconsin and Washington continue, and their outcomes will determine whether staking access changes in those states. The Nov. 3 midterm elections may also affect the federal legislative environment, though no result can be assumed in advance.

Sources

• Cointelegraph