New Jersey Lifts Coinbase Staking Ban Ahead of Crypto Midterms

New Jersey’s Bureau of Securities has rescinded its 2023 cease-and-desist order against Coinbase’s staking service, ending a more than three-year ban on new staking deposits for residents. Acting Bureau Chief Keith A. Alt signed the Oct. 30 notice, which also withdrew a $5 million penalty without prejudice and without a ruling on the merits, leaving the regulator free to pursue another enforcement action later. Coinbase learned of the planned reversal on Oct. 29, and CEO Brian Armstrong said users would regain access to staking “very soon.”

Coinbase estimates that New Jersey customers missed more than $15 million in staking rewards while the restrictions were in place. Staking allows cryptocurrency holders to commit assets to help validate transactions and secure a blockchain in exchange for rewards; Coinbase facilitates the process and typically takes a portion of the returns. The New Jersey decision is significant because California, Maryland and Wisconsin continue to pursue enforcement cases, while Washington allows staking but is seeking a $4 million fine.

California led the 10-state task force responsible for the 2023 enforcement actions, which affected more than 600,000 accounts in the state. Coinbase says Californians have missed over $89 million in staking rewards since the cases began. The company still faces the greatest regulatory risk in California, where new staking remains unavailable and the state is pressing its enforcement case.

The reversal came ahead of the Nov. 3 U.S. midterm elections, with prediction markets favoring Democrats to gain control of the Senate. New Jersey Gov. Mikie Sherrill and Sen. Cory Booker have both played roles in federal crypto legislation, while industry groups such as Fairshake and affiliated super PACs are supporting candidates from both parties. New Jersey’s move provides Coinbase with a regulatory win just as debates over digital-asset market structure and the Senate Banking Committee’s leadership intensify.