New Jersey Drops Coinbase Staking Order and $5M Penalty

Coinbase order withdrawn without a merits ruling

The operative sentence in the signed notice hosted by Coinbase states: “The Coinbase Order is rescinded, without prejudice.”

Acting Bureau Chief Keith A. Alt signed the two-page document. It expressly preserves the bureau’s ability to bring future enforcement action and makes no adjudication on the merits. The withdrawal therefore does not establish a general legal ruling about every staking arrangement.

The company’s third-quarter filing records an earlier step: New Jersey informed Coinbase on October 29 that it intended to rescind the order. The next day’s signed notice supplies the completed action beyond that disclosure of intent.

The filing traces the dispute to June 2023, when ten state securities regulators initiated actions alleging violations involving Coinbase’s staking services. Coinbase disputed those claims. Agreements reached in July 2023 restricted new staking funds in California, New Jersey, South Carolina and Wisconsin; Maryland reached a similar agreement in October.

Five states, Alabama, Kentucky, Illinois, South Carolina and Vermont, withdrew or otherwise ended their actions in March and April 2025, according to the filing. New Jersey’s decision follows that earlier retreat rather than beginning a nationwide resolution.

The remaining differences illustrate the layers described in Daily Crypto Briefs’ guide to U.S. crypto regulation: product availability depends on the relevant jurisdiction and proceeding, even when customers use the same national platform.

New Jersey staking access still needs confirmation

Coinbase’s staking eligibility page, checked November 3, still groups New Jersey with California, Maryland and Wisconsin. Its table says customers in those states cannot stake new principal or restake withdrawn principal and earned rewards.

Existing eligible stakers can remain staked and continue receiving rewards, although those rewards do not compound through restaking under the listed policy. Customers can request to unstake. That distinction means the restrictions did not stop every existing customer from earning rewards throughout the dispute.

Washington is listed separately: residents remain eligible to stake despite regulatory notices. An outstanding state proceeding and a prohibition on adding funds are therefore different measures of the dispute’s practical reach.

The help page also requires an account in good standing, residence in an eligible jurisdiction and applicable tax identification information. Removing a state restriction would not remove those ordinary account conditions.

The reviewed notice does not set out a customer rollout schedule. Until Coinbase updates its guidance or confirms the operational change, a completed rescission should not be presented as independently verified access for every affected account.

Coinbase estimates missed New Jersey rewards above $15M

Coinbase’s staking advocacy page estimates that New Jersey users missed more than $15 million in potential rewards. It puts California above $89 million, Maryland above $7 million and Wisconsin above $3 million.

Those are the company’s estimates, based on aggregate growth in rewards paid in states without the proceedings. They are not a regulator’s damages finding, a promised compensation pool or assets removed from customer accounts. The advocacy page also continues to describe New Jersey as a holdout, underscoring that public-facing guidance can lag a signed decision.

Staking commits eligible crypto to help a blockchain validate transactions. In its explanation of the service, Coinbase says it pools customers’ assets, handles validation and distributes network rewards. Rewards depend on the asset, and earning or unstaking can involve waiting periods.

Coinbase also identifies possible losses from network or validator failures. A regulatory withdrawal does not remove those operating risks or guarantee a return. The same separation between authorization and product delivery appears in BNY’s institutional staking plans with Galaxy, which were subject to regulatory review.

Broader sentiment remained cautious. Alternative.me’s Fear and Greed Index showed 26, or Fear, on November 3, compared with 37 the previous day. The indicator measures market sentiment rather than demand for Coinbase staking.

The next concrete development is Coinbase confirming when New Jersey customers can add eligible assets again. A revised state table, an explicit launch notice and account-level availability would clarify implementation; the reviewed primary materials did not provide that date as of November 3.