New Jersey Ends Coinbase Staking Ban, Withdraws $5M Penalty

New Jersey’s securities regulator has rescinded its 2023 cease-and-desist order against Coinbase’s staking service and withdrawn a $5 million penalty, CoinCentral reported on November 3, 2026. The Oct. 30 notice, signed by Acting Bureau Chief Keith A. Alt, lifts a ban that had kept residents from putting new funds into staking for over three years.

The order was withdrawn without prejudice and without a ruling on the merits, so the Bureau of Securities could still bring a new enforcement action later. Coinbase disclosed the development in its third-quarter filing, stating that the regulator told the company on Oct. 29 that it planned to rescind. CEO Brian Armstrong said New Jersey users would regain staking access “very soon”, though Coinbase’s eligibility page still lists New Jersey restrictions with no confirmed reopening date.

Key facts

• New Jersey’s Bureau of Securities issued the original order against Coinbase Global and Coinbase Inc. on June 6, 2023, arguing its staking products needed registration under state securities law.
• The Oct. 30, 2026 rescission also withdrew a $5 million penalty, without prejudice and without a ruling on the merits.
• California, Maryland, Wisconsin and Washington are still pursuing staking-related cases, per Cointelegraph; Washington allows staking but seeks a $4 million fine.
• Coinbase estimates New Jersey users missed more than $15 million in rewards and California users more than $89 million.
• Alabama, Kentucky, Illinois, South Carolina and Vermont withdrew their actions in March and April 2025, according to crypto.news.

What the three-year restriction covered

The order applied to new staking only. Customers who already had staked balances kept earning rewards, but could not restake or compound them, and could unstake at any time — after which the principal and earned rewards could not return to the service. That means describing the dispute as a total three-year halt to rewards would overlook customers whose existing balances stayed eligible, as crypto.news noted.

New Jersey joined California, Maryland and Wisconsin in Coinbase’s current restrictions table, while Washington appears separately because residents there can still stake. Coinbase said in 2023 that it would comply with the preliminary orders while disputing the claim that its staking services were securities; crypto.news reported that its filing records agreements with four states in July 2023 and with Maryland that October. New York opened staking access separately in October 2025, Coinbase said at the time, putting missed rewards across the four restricted states at more than $130 million.

Why it matters

The decision eases one front in a multi-state enforcement campaign that California led through a ten-state task force in 2023, covering more than 600,000 California accounts. The reports differ on timing and tone: Cointelegraph and CoinGecko’s Nov. 2 post treat the ban as lifted, while crypto.news stressed that the filing described a planned withdrawal and that Coinbase’s customer guidance still lists New Jersey restrictions. CoinCentral put the New Jersey estimate at more than $15 million in missed rewards; crypto.news noted an earlier Coinbase figure of more than $90 million across four states that did not break out New Jersey separately. Those figures are company estimates, not compensation promised to customers.

Elections and the next moves

The rescission landed a day before the Nov. 3 midterm elections. Prediction markets favor Democrats to take Senate control, which would put Sen. Elizabeth Warren, a prominent crypto critic, in line to chair the Senate Banking Committee; Sen. Cynthia Lummis, a leading industry advocate, is set to retire in January 2027. New Jersey’s reversal came under Democratic Gov. Mikie Sherrill, who voted for both the CLARITY and GENIUS bills while in the House, and Sen. Cory Booker helped negotiate market structure legislation but opposed advancing CLARITY in September. Fairshake and its affiliated super PACs are backing 19 Republicans and 14 Democrats in House races, Cointelegraph reported, and the number of members of Congress with an A rating from Stand With Crypto has risen to 332 from 96 in 2023, according to Reuters.

What to watch

Coinbase’s eligibility page for New Jersey is the concrete signal to track, since no reopening date has been set. Court and regulatory dockets in California, Maryland, Wisconsin, and Washington — including Washington’s $4 million fine request — determine whether the remaining states follow New Jersey. The midterm results will shape federal market structure legislation that the state cases sit alongside.

This article is not financial advice, and crypto markets are volatile and uncertain.

Disclaimer: This article is for information only and is not investment, financial or trading advice. Cryptocurrency prices are highly volatile. Always do your own research.

Sources: CoinCentral, Cointelegraph, crypto.news