New Jersey Withdraws Coinbase Staking Order, but Reopening Date Remains Unclear

New Jersey withdraws the order, but access is still pending

New Jersey’s Bureau of Securities has rescinded the 2023 order that stopped Coinbase from accepting new staking funds from customers in the state. The notice, dated October 30 and signed by Acting Bureau Chief Keith A. Alt, also withdraws a $5 million penalty associated with the order. For local customers, the decision removes the state restriction on new staking, but it does not itself restore access through Coinbase.

The bureau had informed Coinbase of its intention to rescind on October 29, according to the exchange’s third-quarter report filed with the Securities and Exchange Commission. Coinbase chief executive Brian Armstrong said New Jersey users would regain access very soon. However, the company’s eligibility page still listed the state among places where customers could not stake new principal, and Coinbase had not announced a reopening date.

The gap between the regulator’s notice and the service becoming available matters in practical terms: customers cannot add funds until Coinbase updates its systems. The order’s withdrawal therefore changes the regulatory barrier, not necessarily the immediate customer experience. New Jersey residents had been estimated to have missed about $15 million in rewards during the restriction, but the rescission does not make those past rewards available or provide a stated compensation arrangement.

A multistate case that narrowed over time

The New Jersey action began on June 6, 2023, when its securities bureau joined regulators in nine other states in challenging Coinbase’s staking program. The states alleged that the service was an unregistered securities offering under their laws. California led the coordinated effort, whose states also included Alabama, Illinois, Kentucky, Maryland, South Carolina, Vermont, Washington and Wisconsin.

In July 2023, Coinbase agreed with California, New Jersey, South Carolina and Wisconsin to prevent customers from staking new funds while their cases awaited final adjudication. Maryland reached a similar agreement later that year, in October. The limits applied to new principal rather than every existing position: customers who had staked before the orders could continue earning rewards, but could not add funds or compound the rewards they received.

The state proceedings ran alongside the SEC’s June 2023 lawsuit against Coinbase, which included staking among its claims. The SEC dismissed that case in February 2025. Several state matters also receded: Alabama, Kentucky, Illinois, South Carolina and Vermont dismissed, vacated or withdrew their actions in March and April 2025. New Jersey’s withdrawal makes it the sixth of the original ten states to step back.

What the rescission resolves—and leaves open

The rescission ends New Jersey’s existing restriction on Coinbase accepting new staking in the state, but it is not a ruling that the service complies with securities law. The bureau made no finding on whether Coinbase’s staking program is a security. Its notice says the withdrawal is without prejudice, leaving the regulator able to bring a new action rather than closing off the issue permanently.

That distinction leaves the central legal question unresolved for Coinbase and state regulators. The company describes the state matters in its filing as preliminary and says an adverse resolution could materially affect its business. New Jersey’s decision removes one current order, but does not establish a general legal standard for staking or determine how other states should treat the service.

The timing also explains why public statements and customer-facing information did not immediately align. Coinbase reported that the bureau had expressed an intent to rescind, while the October 30 notice formalized the withdrawal; neither supplied a date for reopening staking in the state. Armstrong’s assurance of a return soon is not a published schedule, so customers still have to wait for a Coinbase system update.

State restrictions persist amid unsettled policy

Coinbase has argued that state restrictions put it at a competitive disadvantage because residents could stake through other platforms while being blocked from using its service. In an April 2025 post, company executive Ryan VanGrack made that case. Coinbase estimated that forgone rewards across the four restricted states exceeded $130 million as of October 2025, a company figure that highlights the potential scale of the restrictions without resolving their legal basis.

Four state matters remain, but their rules are not identical. California, Maryland and Wisconsin continue to bar new staking on Coinbase while their cases proceed. Washington allows staking but is pursuing a $4 million fine. Coinbase separately estimated that California residents had missed more than $89 million in rewards since 2023; that estimate concerns California and should not be conflated with the total it reported for four states.

The broader policy setting has shifted without settling the state-level disputes. The SEC has withdrawn from registration-based cases it brought in 2023, while 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. The New Jersey bureau, or a future SEC, could revisit the question, so the long-term regulatory position remains uncertain.

Source: BitcoinMagazine