New Jersey Ends Coinbase Staking Freeze After Three‑Year Legal Dispute

New Jersey’s securities regulator has withdrawn the 2023 cease‑and‑desist order that prevented Coinbase from offering staking to new customers in the state, concluding a three‑year standoff that deprived residents of an estimated $15 million in potential rewards.

The Bureau of Securities issued a notice on Oct. 30, signed by Acting Bureau Chief Keith A. Alt, which rescinds both the order and its $5 million penalty. The withdrawal is without prejudice and does not constitute a decision on the underlying legal issues.

Coinbase reported the development in its third‑quarter filing with the SEC, noting that the regulator informed the company of its intent to rescind the order on Oct. 29.

Coinbase CEO Brian Armstrong said New Jersey users would regain access to staking “very soon.”

As of Monday, Coinbase’s eligibility page still listed New Jersey among the states where customers cannot stake new principal, and no reopening date has been announced.

How the staking case began

The order dates back to June 6, 2023, when the New Jersey bureau joined regulators in nine other states—Alabama, California, Illinois, Kentucky, Maryland, South Carolina, Vermont, Washington, and Wisconsin—in a coordinated action against Coinbase’s staking program.

The states alleged that the service amounted to an unregistered securities offering under state law.

California led the task force, covering more than 600,000 accounts. In July 2023, Coinbase agreed with California, New Jersey, South Carolina, and Wisconsin to block customers in those states from staking new funds pending final adjudication. Maryland reached a similar agreement in October 2023.

Customers who had already staked continued to earn rewards but were barred from adding principal or compounding those earnings.

The state actions ran parallel to the SEC’s June 2023 lawsuit against Coinbase, which named staking among its claims. The SEC dismissed that case in February 2025. Alabama, Kentucky, Illinois, South Carolina, and Vermont dismissed, vacated, or withdrew their own actions in March and April 2025. New Jersey is the sixth of the original ten states to step back.

What the withdrawal does and does not do

Rescinding the order removes the restriction on new staking in New Jersey. It does not resolve the underlying legal question. The bureau made no finding on whether Coinbase’s staking program is a security, and the “without prejudice” language preserves its ability to file a new action. Coinbase’s filing describes the state matters as “preliminary” and warns that an adverse resolution “could have a material impact” on the business.

The filing indicates a planned rescission rather than a completed one, explaining the gap between Armstrong’s statement and the unchanged eligibility page. The change for New Jersey residents will take effect when Coinbase updates its systems, not at the time the notice was signed.

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

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

The decision comes as federal policy has shifted but not settled. 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 action by more than a year and a half.

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

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