New Jersey Lifts Coinbase Staking Ban After Three Years
The regulator is dropping the fine and the ban, but is leaving the door open for a new case. For Coinbase, staking matters for revenue, while several U.S. states still keep restrictions in place.
Key Takeaways
- New Jersey withdrew its 2023 staking order against Coinbase, ending the $5 million fine and the ban on new staking.
- The regulator did this without giving up the option of a new case and did not say whether there had been a law violation.
- Coinbase remains restricted in several states, while staking is an important but pressured revenue source for the company.
New Jersey has withdrawn its 2023 staking order against Coinbase. That also removes the $5 million (€4.5 million) fine and the ban that kept residents from staking new funds through the crypto exchange. That does not mean the case is fully over, because the regulator withdrew the decision without giving up the option of a new case.
What New Jersey Is Withdrawing
The move on October 30 means Coinbase can once again offer staking for new deposits in New Jersey, although the regulator is not ruling on whether the service broke the law at the time. In June 2023, the Bureau of Securities called the service an unregistered security. At the time, 145,270 residents of the state were using it, according to the attorney general's office.
Coinbase stopped staking in four states a few weeks later. According to top lawyer Molly Abraham, users in New Jersey lost out on millions of dollars in rewards because of that. In April 2025, Coinbase estimated the missed amount across multiple states at $90 million (€80.2 million).
Pressure on Coinbase Remains
The timing matters for Coinbase shareholders, because staking remains an important source of revenue. In the third quarter, Coinbase brought in $85.7 million (€76.4 million) from blockchain rewards, mostly from staking, down from $184.6 million (€165 million) a year earlier. The company linked $111.8 million (€99.7 million) of that drop to lower Solana and Ethereum prices. Lower reward rates cut another $18.9 million (€16.9 million) from revenue.
That weaker income stream fits into a broader picture. In the first quarter of 2026, Coinbase's subscription and services revenue, which includes staking income, fell 16% from the previous quarter to $584 million (€521 million). That shows this business line is still sensitive to the state of the crypto market.
Four States Still Keep the Brakes On
At the federal level, the tension around staking has already eased somewhat. The SEC dropped its lawsuit against Coinbase in February 2025, and staff members at the regulator said in May 2025 that protocol staking is generally not a securities issue. That view is not binding, and Commissioner Caroline Crenshaw disagreed.
Even so, staking remains restricted in several states. Alabama, Illinois, Kentucky, South Carolina, and Vermont dropped their cases in 2025, but California, Maryland, and Wisconsin still have agreements in place that block new staking. Washington is keeping its action open. In a recent filing, Coinbase also named Wisconsin, Maryland, California, and Washington as the next states where the issue is still active. The broader shift fits a pattern in which regulators are changing course; the SEC also dropped its case against Coinbase, while the debate over staking rules in the U.S. is still not fully settled.