TLDR
- New Jersey rescinded its 2023 cease-and-desist order against Coinbase’s staking service.
- The $5 million penalty was withdrawn without prejudice, so the state could act again.
- California, Maryland, Wisconsin and Washington still pursue staking cases.
- Coinbase estimates New Jersey users missed more than $15 million in rewards.
- The move came a day before the Nov. 3 US midterm elections.
New Jersey’s securities regulator has rescinded its 2023 cease-and-desist order against Coinbase’s staking service. The Oct. 30 notice lifts a ban that kept residents from staking new funds for over three years.
NEWS: New Jersey drops its lawsuit against Coinbase, allowing users to resume staking crypto after over three years. pic.twitter.com/737HwvTq4Y
— CoinGecko (@coingecko) November 2, 2026
The notice was signed by Acting Bureau Chief Keith A. Alt. It also withdrew the $5 million penalty.
The withdrawal came without prejudice and without a ruling on the merits. That leaves the Bureau of Securities free to bring a new action against Coinbase later.
Coinbase disclosed the move in its third-quarter filing. The regulator told the company on Oct. 29 that it planned to rescind the order.
CEO Brian Armstrong said New Jersey users would regain staking access “very soon.” Coinbase’s eligibility page still lists New Jersey restrictions, with no confirmed reopening date.
What the New Jersey Restrictions Covered
The restrictions applied to new staking only. Customers with existing staked balances kept earning rewards, though they could not restake or compound them.
Customers could unstake at any time. Once they did, the principal and earned rewards could not go back into the service.
The New Jersey Bureau of Securities issued its original order on June 6, 2023. It argued that Coinbase’s staking products needed registration under state securities law.
Coinbase has long disputed that claim. It said it would follow the preliminary orders while defending its services.
Coinbase estimates New Jersey users missed more than $15 million in staking rewards. It puts the figure for California users at over $89 million.
California led a ten-state task force behind the 2023 actions. Those actions covered more than 600,000 California accounts.
Five other states already backed off. Alabama, Kentucky, Illinois, South Carolina and Vermont withdrew their actions in March and April 2025.
California, Maryland and Wisconsin also barred new staking while their cases ran. Washington still allows staking, but its case seeks a $4 million fine.
Timing Ahead of the Midterms
The decision came a day before the Nov. 3 midterm elections. Prediction markets favor Democrats to win Senate control.
A Democratic majority would put Sen. Elizabeth Warren, a prominent crypto critic, in line to chair the Senate Banking Committee. Sen. Cynthia Lummis, a leading Republican crypto advocate, is set to retire in January 2027.
The reversal came under Democratic Gov. Mikie Sherrill. As a House member, she voted for both the CLARITY and GENIUS bills.
Sen. Cory Booker helped negotiate market structure legislation. He opposed advancing CLARITY in September.
Fairshake and its affiliated super PACs are backing 19 Republicans and 14 Democrats in House races. The number of members of Congress with an A rating from Stand With Crypto has risen to 332, up from 96 in 2023, according to Reuters.
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