Coinbase Staking Returns to New Jersey After Three-Year Battle Ends

TLDR

Table of Contents

New Jersey rescinded its 2023 enforcement action against Coinbase staking operations and eliminated the accompanying $5 million penalty.
The regulatory agency withdrew the order on October 30 without making a determination regarding potential securities law violations.
Residents of New Jersey forfeited approximately $15 million in potential staking rewards throughout the restriction period, according to Coinbase calculations.
CEO Brian Armstrong announced staking would resume shortly, though Coinbase has yet to specify an official launch date.
Current Coinbase users in New Jersey maintained the ability to earn staking rewards on existing holdings while being prohibited from depositing additional capital.

New Jersey has rescinded its 2023 enforcement action targeting Coinbase staking services, opening the door for state residents to deposit cryptocurrency into the program following a three-year hiatus. The regulatory body also eliminated a $5 million financial penalty.

The October 30 notification, bearing the signature of Acting Bureau Chief Keith A. Alt, avoided rendering a judgment about whether the staking offering violated securities regulations. According to Coinbase’s calculations, New Jersey residents forfeited more than $15 million in potential earnings.

Regulator Rescinds Enforcement Action

Coinbase disclosed in its third-quarter filing that state officials informed the company on October 29 about the decision to withdraw the enforcement measure. Chief Executive Brian Armstrong indicated that service availability would resume in the near future.

We keep fighting (and winning) these cases for our customers.

To our New Jersey users: very soon, you’ll finally be able to participate in staking again. https://t.co/G6gkPHexSx

— Brian Armstrong (@brian_armstrong) November 2, 2026

Yet Coinbase’s eligibility page continues to identify New Jersey among jurisdictions where users remain unable to stake additional assets. The platform has yet to announce when services will officially restart. Current participants continue to accumulate earnings.

Timeline of 2023 Limitations

New Jersey became one of ten states on June 6, 2023, to allege that Coinbase provided unregistered securities via staking offerings. Coinbase rejected these allegations. Staking represents one of the ways crypto exchanges earn revenue by charging service fees.

In July of that year, Coinbase consented to limit new staking activity in California, New Jersey, South Carolina and Wisconsin. Maryland secured a comparable arrangement in October. These limitations persisted throughout ongoing state proceedings.

Users holding existing staked positions maintained their ability to collect rewards while facing restrictions on depositing additional capital or reinvesting their earnings. Account holders retained withdrawal rights, though they faced prohibition on re-staking those assets.

Ongoing Cases in Multiple Jurisdictions

Recent research revealed staking and mining income fell 37% throughout the broader blockchain sector during the first six months of 2026. This data encompassed the entire industry rather than Coinbase specifically.

Alabama, Kentucky, Illinois, South Carolina and Vermont concluded their enforcement actions in 2025. California, Maryland and Wisconsin maintain restrictions on new staking deposits. Washington permits staking operations while pursuing a $4 million financial penalty. Coinbase also calculates that California residents have lost approximately $89 million in potential rewards since limitations took effect.

Legal Questions Remain Unresolved

New Jersey withdrew its enforcement action “without prejudice.” This procedural designation preserves the bureau’s authority to initiate future proceedings. The notification avoided determining whether Coinbase staking operations fall within state securities regulations.

The SEC dismissed its independent Coinbase lawsuit in February 2025. Congress has yet to enact the CLARITY market structure legislation. A renewed debate over the CLARITY Act emerged this week concerning crypto regulation following the Binance security breach. Coinbase cautioned in its regulatory filing that unfavorable outcomes in pending state cases could impact operations.

✨ Limited Time Offer