New Jersey Ends Coinbase Staking Ban After 3 Years: Which States Are Next?
New Jersey has dropped its 2023 Coinbase staking order, eliminating a $5 million penalty and ban that prevented residents from staking new funds on the exchange.
The October 30 rescission is without prejudice, meaning the state can still bring a new case against the cryptocurrency exchange. The decision comes as Coinbase's staking-driven revenue fell 54% last quarter, impacting both New Jersey users and shareholders.
Staking Ban History
Staking involves locking up cryptocurrencies like Ethereum or Solana to help run a blockchain, in return for new tokens. Coinbase provides this service for customers and keeps a portion of the rewards. In June 2023, New Jersey's Bureau of Securities classified Coinbase's staking service as an unregistered security.
At the time, 145,270 New Jersey residents were using the service. Coinbase halted staking in four states weeks after the New Jersey action. The new order signed by Acting Bureau Chief Keith A. Alt makes no determination on whether staking violated state law.
New Jersey has formally dropped its staking lawsuit against Coinbase and lifted its cease-and-desist order, paving the way for our NJ users to resume staking after missing millions of dollars in rewards over the past 3+ years.
Financial Impact
In April 2025, Coinbase estimated missed rewards across states at $90 million. Blockchain rewards, primarily from staking, earned Coinbase $85.7 million in the third quarter of 2026, down from $184.6 million a year earlier. Coinbase attributed $111.8 million of this decline to lower Solana and Ethereum prices, with lower reward rates accounting for an additional $18.9 million.
Remaining Restrictions
While federal regulators have eased pressure, with the SEC dropping its lawsuit against Coinbase in February 2025 and staff later suggesting protocol staking generally doesn't involve securities, four states still maintain restrictions. Alabama, Illinois, Kentucky, South Carolina, and Vermont dropped their cases in 2025.
Wisconsin, Maryland, California, and Washington are next.
California, Maryland, and Wisconsin currently have agreements barring new staking, while Washington's action remains open. Coinbase warned that losing remaining state cases could materially hurt its business.
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