New Jersey Lifts Coinbase Staking Ban, Letting Service Resume After Nearly 3 Years
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New Jersey has withdrawn its order barring cryptocurrency exchange Coinbase from offering staking services.
Cointelegraph reported on November 2 that the New Jersey Bureau of Securities rescinded its cease-and-desist order against Coinbase’s staking service on October 30. The move clears the way for Coinbase to offer new staking services to users in the state for the first time in nearly three years.
The decision also withdraws a $5 million fine imposed in 2023. Still, New Jersey regulators rescinded the order without making a final determination on whether the staking service violated securities laws. The state could still pursue new enforcement action over the same issue if needed.
Coinbase said in its third-quarter filing that it was notified on October 29 that New Jersey planned to withdraw the order. Chief Executive Officer Brian Armstrong said customers in New Jersey will soon be able to use staking services again.
Regulators in 10 U.S. states, including New Jersey, launched coordinated action against Coinbase in 2023, alleging its staking service violated securities laws. Staking allows users to put their crypto holdings to work helping operate blockchain networks in exchange for rewards. Coinbase has provided the service on customers’ behalf and collected fees.
Regulatory issues in the U.S. have not been fully resolved. Legal proceedings against Coinbase are still underway in California, Maryland, Wisconsin and Washington. Washington allows staking services but is still seeking to impose a $4 million fine on Coinbase.
Coinbase argues that state-by-state regulation has prevented users from receiving substantial staking rewards. By the company’s estimate, California customers have missed out on more than $89 million in rewards since 2023, while more than $15 million in reward opportunities were curtailed in New Jersey.
The decision comes as cryptocurrency regulation has emerged as a key issue ahead of the U.S. midterm elections. The industry is calling for a unified federal regulatory framework, but related legislation has yet to be completed.
