New Jersey has withdrawn its 2023 order targeting Coinbase’s staking service, lifting a $5 million fine and a restriction on residents adding new stakes. The state can still bring a new case, however, and the withdrawal does not settle whether the service complies with state securities law. Four other states continue to restrict new staking.
Withdrawal leaves the legal question open
In June 2023, the New Jersey Bureau of Securities found that Coinbase’s staking service constituted unregistered securities. The state attorney general’s office said at the time that 145,270 New Jersey residents used the service. Weeks later, Coinbase suspended staking in four states.
The October 30 withdrawal order was signed by Keith A. Alt, acting director of the Bureau of Securities. It does not determine whether Coinbase’s staking arrangements violated state law, nor does it rule out future legal action. The decision removes the earlier order; it is not a final ruling on the service’s legality.
Coinbase Chief Legal Officer Molly Abraham said New Jersey users had missed out on millions of dollars in staking rewards over the past three years. The withdrawal may clear the way for local users to participate again, but details on when service might resume, which assets would be eligible and what conditions would apply have not been provided.
Four states maintain restrictions as Coinbase rewards revenue falls
New Jersey’s move does not change the restrictions elsewhere. Four states still bar users from adding new stakes. The states have not been identified in the available information, which also does not indicate whether they will follow New Jersey’s lead. Rules for staking products continue to vary by state.
The regulatory change comes as Coinbase’s staking-related rewards revenue declines. The company reported $85.7 million for the third quarter, down 54% from the previous quarter; the specific basis for the comparison was not stated. Staking revenue is a direct component of Coinbase’s business and matters to COIN shareholders, making the state-level policy shift notable alongside the reported drop.
New Jersey has withdrawn its 2023 order and the $5 million fine but retained the option to file a new case. Restrictions in the other four states remain in place. Whether users can resume staking in New Jersey, and whether the legal dispute returns, depends on further state decisions and Coinbase’s arrangements.