New Jersey has formally withdrawn its securities enforcement action against Coinbase, removing a regulatory restriction that prevented residents from staking additional cryptocurrency through the exchange for more than three years.
The New Jersey Bureau of Securities rescinded its June 2023 cease-and-desist order on October 30, 2026, alongside a $5 million civil penalty imposed over allegations that Coinbase offered unregistered securities through its staking programme.
The decision was disclosed publicly on November 2, with Coinbase representatives confirming that the state had dropped its enforcement action. Coinbase chief executive Brian Armstrong said New Jersey customers would regain access to staking services soon, although the company has not announced an exact reopening date.
The withdrawal was made without prejudice and did not include a ruling on the underlying allegations, meaning New Jersey retains the ability to pursue future enforcement proceedings.
Three-Year Dispute Over Crypto Staking Comes to an End
The dispute began on June 6, 2023, when New Jersey securities regulators accused Coinbase of offering staking products that qualified as unregistered securities under state law. The Bureau of Securities issued a summary cease-and-desist order and assessed a $5 million penalty.
The action formed part of a coordinated regulatory campaign involving ten US states, including California, Maryland, Wisconsin and Washington. Under subsequent agreements, Coinbase restricted customers in several jurisdictions from staking additional assets while the legal proceedings remained unresolved.
Affected New Jersey users could generally retain existing staked holdings and continue earning rewards, but could not stake new principal or reinvest accumulated rewards. Customers who withdrew their existing stakes were also prevented from restaking those assets through Coinbase.
The restrictions therefore affected new participation and compounding rather than automatically terminating every existing staking position. Coinbase disputed the allegations, arguing that its staking services should not be classified as securities offerings.
The company maintained that staking involves providing technical infrastructure to participate in proof-of-stake blockchain validation. New Jersey’s latest decision removes the state’s enforcement order without determining whether either legal interpretation was correct.
Coinbase representatives said the restrictions had prevented residents from accessing millions of dollars in potential staking rewards. However, estimates of foregone rewards depend on assumptions about participation, cryptocurrency prices and staking yields.
Four States Remain as US Staking Regulation Evolves
New Jersey joins several states that have withdrawn enforcement proceedings against Coinbase since 2025. Alabama, Illinois, Kentucky, South Carolina and Vermont previously dismissed or rescinded their respective actions. California, Maryland, Wisconsin and Washington remain involved in unresolved regulatory proceedings, although the restrictions and practical staking eligibility differ by jurisdiction.
The New Jersey decision follows the US Securities and Exchange Commission’s February 2025 dismissal of its federal enforcement lawsuit against Coinbase. That dismissal was also based on regulatory policy considerations rather than a judicial determination that all Coinbase products complied with securities law.
The latest state-level withdrawal reflects a broader shift toward developing clearer cryptocurrency rules through legislation and regulatory guidance instead of relying exclusively on enforcement actions. Staking remains commercially important for cryptocurrency exchanges because customers can earn protocol-generated rewards while platforms collect service fees.
However, staking rewards are variable and depend on blockchain conditions, validator performance and applicable service charges. For Coinbase, restoring New Jersey access could expand customer participation and support staking-related revenue.
The company has not disclosed how many residents are expected to resume staking or the additional assets they might deposit. For New Jersey customers, the immediate development is the removal of the regulatory restriction, with actual access dependent on Coinbase updating its services and eligibility requirements.
The remaining state proceedings will determine whether similar restrictions persist elsewhere in the United States. New Jersey’s withdrawal resolves the existing state action but does not establish a nationwide legal precedent or eliminate the possibility of future regulatory scrutiny.
