New Jersey has officially withdrawn its 2023 cease-and-desist order against Coinbase's cryptocurrency staking service, ending restrictions that prevented residents from staking additional assets through the exchange.
The decision, issued on October 30, 2026, also removes a proposed $5 million financial penalty previously imposed by the state's securities regulator.
Acting Bureau Chief Keith A. Alt signed the withdrawal order, bringing the existing enforcement proceeding to an end.
However, the regulator withdrew its action without prejudice and without ruling on the underlying legal arguments.
This means New Jersey retains the authority to initiate another enforcement action against Coinbase in the future.
Coinbase CEO Brian Armstrong welcomed the development, indicating that staking services would become available to New Jersey customers again very soon.
Coinbase Customers Could Regain Staking Rewards
The decision opens the door for New Jersey residents to resume staking additional cryptocurrency through Coinbase after more than three years of restrictions.
Staking allows cryptocurrency holders to participate in securing proof-of-stake blockchain networks while earning rewards.
Exchanges such as Coinbase simplify the process by handling technical operations and distributing rewards after deducting service fees.
The original restrictions prevented customers from staking new funds, limiting their ability to participate in these programs.
According to Coinbase, New Jersey customers have missed out on more than $15 million in potential staking rewards since the enforcement action began.
The exchange disclosed the regulator's decision in its third-quarter filing, noting that it received advance notification on October 29.
Four States Continue Legal Action Against Coinbase
Although New Jersey has withdrawn its case, Coinbase still faces staking-related enforcement proceedings in California, Maryland, Wisconsin and Washington.
The disputes originated in June 2023, when a coalition of ten state securities regulators challenged Coinbase's staking services.
California's enforcement action covered more than 600,000 customer accounts and remains among the most significant outstanding cases.
Coinbase estimates that California residents have missed more than $89 million in potential staking rewards during the restrictions.
Maryland and Wisconsin have also maintained limitations on new staking activity while their proceedings continue.
Washington has taken a different approach, allowing staking services to continue while pursuing a proposed $4 million penalty.
The remaining cases demonstrate that cryptocurrency staking regulations continue to differ across US states.
Federal Crypto Regulation Remains Uncertain
New Jersey's reversal comes as the cryptocurrency industry continues pushing for clearer federal regulations governing digital asset services.
The proposed CLARITY Act aims to establish a broader framework for cryptocurrency oversight, but disagreements in Congress have delayed progress.
The timing is significant, with the November 3 US midterm elections potentially reshaping congressional negotiations over digital asset legislation.
New Jersey Governor Mikie Sherrill previously supported both the CLARITY Act and GENIUS Act while serving in Congress.
Meanwhile, Senator Cory Booker has participated in cryptocurrency market structure negotiations, although he opposed advancing CLARITY in September.
Crypto Industry Pushes for Clearer Staking Rules
Cryptocurrency companies are increasing their political engagement as regulatory uncertainty continues affecting US staking services.
Industry-backed political groups, including Fairshake and affiliated organizations, have supported candidates from both major parties ahead of the midterms.
According to the supplied reporting, these groups are backing 19 Republican and 14 Democratic House candidates.
Coinbase's remaining state-level disputes illustrate the consequences of operating without a consistent nationwide framework for cryptocurrency staking.
New Jersey's decision removes one regulatory obstacle, but it does not establish a nationwide legal precedent or resolve the remaining enforcement cases.
For now, Coinbase customers in New Jersey are closer to regaining full staking access, while users in several other states continue waiting for legal clarity.
