The New Jersey securities regulator has rescinded its 2023 order on Coinbase staking, lifting the ban and voiding a $5 million penalty that had prevented the exchange's users from placing new funds into staking.
However, the October 30 withdrawal does not close the case definitively — the regulator may bring claims again. The decision comes amid a 54% quarterly drop in Coinbase's staking revenue, affecting both New Jersey holders and Coinbase (COIN) shareholders.
What the New Jersey order changes for Coinbase users
Staking is the locking of tokens, such as Ethereum (ETH) or Solana (SOL), to support the operation of a blockchain. In return, users receive new coins. Coinbase performs staking on behalf of its clients and charges a commission.
In June 2023, the New Jersey Bureau of Securities deemed this service an unregistered security. At that time, 145,270 state residents were using the service. A few weeks later, Coinbase halted staking in four states.
The new order, signed by Acting Bureau Chief Keith A. Alt, contains no findings that staking violated state law. Coinbase Chief Legal Officer Molly Abraham said New Jersey users lost millions of dollars in potential rewards over three years.
In April 2025, Coinbase estimated the forgone rewards of users across various states at $90 million.
Why Coinbase shareholders are watching the staking dispute
Coinbase's revenue from staking and related rewards for the third quarter was $85.7 million versus $184.6 million a year earlier. The company attributed the $111.8 million revenue decline to falling prices of Solana and Ethereum. A further $18.9 million was shaved off by lower reward rates.
In the same October 29 report, Coinbase disclosed for the first time New Jersey's plans to rescind the order. The company also warned that losing similar cases in other states could significantly harm its business.
In which states Coinbase staking remains banned for now
Pressure first eased at the federal level. In February 2025, the U.S. Securities and Exchange Commission (SEC) agreed to drop its lawsuit against Coinbase. In May 2025, SEC staff stated that protocol staking is generally not tied to securities. This opinion is non-binding, and Commissioner Caroline Crenshaw disagreed with it.
Meanwhile, Alabama, Illinois, Kentucky, South Carolina, and Vermont dropped their cases in 2025. California, Maryland, and Wisconsin maintain agreements prohibiting new staking, and proceedings in the state of Washington continue.
Cryptalist analysis: New Jersey's withdrawal of claims confirms an emerging trend toward easing regulatory pressure on staking in the U.S., but the persistence of restrictions in California, Maryland, and Wisconsin holds back a full recovery of this Coinbase revenue segment. For institutional investors, the key signal remains the dynamics of staking revenue, which directly depends on the pace of resolving the remaining regional disputes and on ETH and SOL prices.