Coinbase customers in New Jersey can earn staking rewards once again after state regulators formally dropped a lawsuit that had blocked the service since 2023. The decision removes one state from the short list of jurisdictions where the exchange still faces restrictions on staking.

Alongside dismissing the case, New Jersey also lifted a cease-and-desist order that had prevented the company from offering staking to residents, according to Molly Abraham, Coinbase's vice president of legal, who shared the news on X.

"Another one. New Jersey has formally dropped its staking lawsuit against Coinbase and lifted its cease-and-desist order, paving the way for our NJ users to resume staking after missing millions of dollars in rewards over the past 3+ years. Defending our users' access to secure,…"

— Molly Abraham (@mollyisonchain) November 2, 2026

Abraham noted that New Jersey users had been unable to stake for more than three years, missing out on millions of dollars in rewards in the process.

Staking allows users to lock up certain digital assets to help run a blockchain network. In return for supporting the network, they earn rewards paid in cryptocurrency. In Coinbase's model, described as staking-as-a-service, the exchange offers the program to eligible customers.

How the New Jersey Case Began

New Jersey's Bureau of Securities took action against Coinbase in 2023, claiming that the exchange's staking program constituted an unregistered securities offering. Regulators argued that the company should have registered its staking-as-a-service program under state securities laws.

Because of the case, eligible New Jersey residents had been unable to join the program or earn rewards on their holdings for the duration of the proceedings. The litigation lasted roughly three years before it came to an end. With the lawsuit dismissed and the cease-and-desist order lifted, Coinbase can now restore staking services for customers in the state.

Faryar Shirzad, Coinbase's chief policy officer, welcomed the outcome and described it as an important step for staking access across the United States.

The company made clear, however, that its work is not finished. Wisconsin, Maryland, California, and Washington remain among the states where staking restrictions or disputes with Coinbase have yet to be resolved. According to the company, those four states continue to maintain staking restrictions or have unresolved disputes with the exchange, meaning its staking service remains limited or contested in parts of the country. For now, the practical effect is that access to Coinbase's staking program differs from state to state, depending on the outcome of each jurisdiction's restrictions or disputes. How those four outstanding matters are resolved will shape the eventual footprint of the exchange's staking service across the country.

Coinbase Stock and Market Data

The legal win arrived at a time when Coinbase shares were under pressure. The stock traded at $137.83 at press time after falling 3.98%.

Morgan Stanley recently downgraded Coinbase from Equalweight to Underweight and cut its price target from $258 to $120. Analyst Michael Cyprys pointed to falling confidence in an earnings recovery, weaker trading activity, and a softer revenue outlook, while also citing uncertainty in the crypto market.

The bank lowered its 2027 revenue forecast for Coinbase by 28% and cut its adjusted EBITDA forecast for the same year by 47%.

The downgrade followed the release of Coinbase's third-quarter 2026 results. The exchange reported net income of $719 million for the quarter, up from $433 million in the same period last year.

Coinbase has also gained ground in tokenized stocks. Data from Token Terminal shows the company ranked second among tokenized stock issuers by decentralized exchange trading volume over the past seven days. Coinbase's tokenized assets accounted for 26.7% of total trading volume in that period, while Robinhood held the top spot with 27.3%.

Demand for Bitcoin on the platform has been weaker. The Coinbase Premium Index has remained negative for 39 consecutive days, meaning Bitcoin has traded at a lower price on Coinbase than on global exchanges. The stretch of negative readings reflects softer demand for Bitcoin among the platform's customers. On October 30, the index fell to -0.2682% following the Binance hack. At press time, it remained negative at -0.1847%, according to Coinglass data.

This article was originally published on Blockonomi.