New Jersey’s Bureau of Securities announced on October 30 that it is rescinding the 2023 cease‑and‑desist order that barred Coinbase users in the state from adding new funds to the exchange’s staking service. The notice, signed by Acting Bureau Chief Keith A. Alt, also withdrew the associated $5 million penalty without prejudice and without a ruling on the merits, leaving the regulator free to initiate future enforcement actions.
Coinbase disclosed the development in its third‑quarter filing, noting that the regulator informed the company on October 29 of its intent to rescind the order. CEO Brian Armstrong said that New Jersey users would regain access to staking “very soon.”
Staking involves locking cryptocurrency to help validate transactions and secure a blockchain, with participants earning rewards. Coinbase acts as a custodian for customers and takes a fee from the rewards earned.
Other states continue to pursue enforcement actions against Coinbase’s staking services. California, Maryland, Wisconsin and Washington have active cases, with California leading a ten‑state task force that affected more than 600,000 accounts. California and Wisconsin, like New Jersey, previously banned new staking while their cases proceeded. Washington allows staking but seeks a $4 million fine. Coinbase estimates that California users have missed over $89 million in staking rewards since 2023, while New Jersey users missed more than $15 million.
The regulatory shift occurs ahead of the November 3 U.S. midterm elections, a period marked by heightened attention to cryptocurrency policy. New Jersey’s reversal was made under Democratic Governor Mikie Sherrill, who previously supported the CLARITY and GENIUS bills, and Democratic Senator Cory Booker, who has been involved in market‑structure legislation.
