New Jersey has moved to rescind its 2023 cease-and-desist order against Coinbase’s staking service, a decision disclosed in the company’s third-quarter filing and confirmed by a notice signed by Acting Bureau Chief Keith A. Alt on Oct. 30. The order had blocked New Jersey residents from staking new crypto assets for more than three years. The regulator also withdrew a $5 million penalty, though the withdrawal was made without prejudice and without a ruling on the merits, leaving the door open for potential future action.
The original order, issued June 6, 2023 by the New Jersey Bureau of Securities, alleged that Coinbase’s staking products required registration under state securities law. Coinbase has consistently disputed that classification. Under the restrictions, New Jersey customers could not stake new principal. Existing eligible staked balances continued to earn rewards, but those rewards could not be restaked or compounded, and once assets were unstaked they could not be re-staked. Coinbase estimates New Jersey users missed more than $15 million in staking rewards during the period, while California users missed more than $89 million.
New Jersey is the latest state to step back from staking enforcement. Alabama, Kentucky, Illinois, South Carolina and Vermont withdrew their actions in March and April 2025. However, California, Maryland and Wisconsin still maintain restrictions on new staking while their cases proceed. Washington currently allows staking but its case seeks a $4 million fine. Coinbase CEO Brian Armstrong said New Jersey users would regain staking access “very soon,” though the company’s eligibility page still listed New Jersey restrictions at the time of reporting.
The reversal arrived a day before the Nov. 3 U.S. midterm elections. Prediction markets favored Democrats to win Senate control, which could elevate crypto critic Sen. Elizabeth Warren to chair the Senate Banking Committee. The decision also came under Democratic Gov. Mikie Sherrill, who as a House member voted for both the CLARITY and GENIUS bills. The political backdrop highlights shifting dynamics around crypto regulation even as several state-level staking cases remain unresolved.
