New Jersey’s securities regulator has withdrawn the 2023 cease-and-desist order that prevented Coinbase from offering staking to new customers in the state, closing out a three-year confrontation over the exchange’s staking program.
Bitcoin Magazine reported that the dispute cost New Jersey residents an estimated $15 million in missed rewards. The notice from the Bureau of Securities is dated Oct. 30 and signed by Acting Bureau Chief Keith A. Alt. It rescinds both the order and the $5 million penalty attached to it.
The withdrawal was made without prejudice and without a ruling on the merits. In practice, that means the restriction is being lifted, but the regulator did not decide whether Coinbase’s staking program is a security under state law and kept the option to bring a new action later.
Coinbase disclosed the development in its third-quarter report filed with the U.S. Securities and Exchange Commission. The filing says the regulator informed the company on Oct. 29 that it intended to rescind the order. Coinbase CEO Brian Armstrong said users in New Jersey would regain access to staking very soon.
Even so, Coinbase’s eligibility page still listed New Jersey as of Monday among the states where customers cannot stake new principal, and the company had not announced a reopening date. The filing describes a planned rescission rather than a fully completed operational change, which helps explain the gap between Armstrong’s statement and the unchanged product page.
How the case started
The order dates back to June 6, 2023, when New Jersey joined securities regulators in nine other states in coordinated action against Coinbase’s staking service. Those states were Alabama, California, Illinois, Kentucky, Maryland, South Carolina, Vermont, Washington and Wisconsin.
The states argued that the staking service amounted to an unregistered securities offering under state law. California led the task force, and its action covered more than 600,000 accounts.
In July 2023, Coinbase reached agreements with California, New Jersey, South Carolina and Wisconsin to block customers in those states from staking new funds until final adjudication. Maryland reached a similar agreement in October 2023.
Customers who had already staked before the orders were allowed to keep earning rewards. They could not add principal, though, and they could not compound the rewards they received.
State actions outlasted the federal case
The state proceedings ran in parallel with the SEC’s June 2023 lawsuit against Coinbase, which also included staking among its claims. The SEC dismissed that case in February 2025.
After that, Alabama, Kentucky, Illinois, South Carolina and Vermont dismissed, vacated or withdrew their own actions in March and April 2025. With New Jersey now stepping back, it becomes the sixth of the original 10 states to do so.
What the rescission changes — and what it does not
Rescinding the order removes the restriction on new staking in New Jersey. It does not answer the underlying legal question.
The Bureau of Securities made no finding on whether Coinbase’s staking program is a security. Because the notice was issued without prejudice, the agency preserved its ability to file a new case in the future.
Coinbase said in its filing that these state matters remain preliminary and that an adverse outcome could have a material impact on its business. The company’s disclosure also makes clear that the practical change for New Jersey residents arrives when Coinbase updates its systems, not simply when the notice was signed.
Coinbase says the restrictions hurt competition
Coinbase has argued that the state restrictions put it at a competitive disadvantage. In an April 2025 post, Ryan VanGrack said the orders singled out one provider even though residents could still stake through other platforms.
As of October 2025, Coinbase estimated that users across the four restricted states had missed more than $130 million in rewards. The company said California residents alone had missed more than $89 million in rewards since 2023.
Four states still remain
Four states are still pursuing related matters. California, Maryland and Wisconsin continue to block new staking on Coinbase while their cases move forward. Washington allows staking but is seeking a $4 million fine.
The decision arrives at a time when federal policy has shifted but remains unsettled. The SEC has backed away from the registration-based cases it brought in 2023, while the CLARITY market structure bill passed the House in 2025 but stalled in the Senate.
State securities regulators are not bound by the SEC’s enforcement priorities. That is why the staking cases lasted more than a year and a half longer than the federal case. Bitcoin Magazine noted that a future SEC, or a future bureau chief in Trenton, could revisit the issue.
This report is based on Bitcoin Magazine’s article written by Micah Zimmerman.
