New Jersey's securities regulator has withdrawn the 2023 cease-and-desist order that barred Coinbase from offering staking to new customers in the state, ending a three-year standoff that cost residents an estimated $15 million in forgone rewards.

The notice from the Bureau of Securities, dated Oct. 30 and signed by Acting Bureau Chief Keith A. Alt, rescinds the order along with the $5 million penalty attached to it. The withdrawal is without prejudice and includes no ruling on the merits.

Coinbase disclosed the development in its third-quarter report filed with the Securities and Exchange Commission, which states that the regulator informed the company of its intent to rescind on Oct. 29. In a post on X, CEO Brian Armstrong said New Jersey users would regain access to staking “very soon.”

As of Monday, however, the exchange's eligibility page still listed New Jersey among the states where customers cannot stake new principal, and no reopening date has been announced.

How the staking case began

The order traces to June 6, 2023, when the New Jersey bureau joined securities regulators in nine other states — Alabama, California, Illinois, Kentucky, Maryland, South Carolina, Vermont, Washington and Wisconsin — in a coordinated action against Coinbase's staking program. The states alleged the service amounted to an unregistered securities offering under state law. Registration is meant to give regulators visibility into a product's terms before it reaches retail customers, and the disputed question was whether staking fell into that category.

California led the task force, and its action covered more than 600,000 accounts. In July 2023, Coinbase agreed with California, New Jersey, South Carolina and Wisconsin to block customers in those states from staking new funds pending final adjudication. Maryland reached a similar agreement in October 2023.

Customers who had staked before the orders kept earning rewards, but could not add principal or compound the rewards they received. Staking lets customers earn periodic rewards on eligible crypto holdings for helping run the underlying blockchain networks, so the restrictions meant missed rewards rather than frozen accounts.

The state cases ran parallel to the SEC's June 2023 lawsuit against Coinbase, which named staking among its claims. The SEC dismissed that case in February 2025. Alabama, Kentucky, Illinois, South Carolina and Vermont dismissed, vacated or withdrew their own actions in March and April 2025, making New Jersey the sixth of the original ten states to step back.

What the withdrawal does and does not do

Rescinding the order ends the restriction on new staking in New Jersey, but it does not resolve the underlying legal question. The bureau made no finding on whether Coinbase's staking program constitutes a security, and the “without prejudice” language preserves its ability to file a new action. Coinbase's own filing describes the state matters as “preliminary” and says an adverse resolution “could have a material impact” on the business.

The filing also describes a planned rescission rather than a completed one, which explains the gap between Armstrong's statement and the unchanged eligibility page. For New Jersey residents, the change arrives when Coinbase updates its systems — not when the notice was signed.

Coinbase has framed the state restrictions as a competitive disadvantage. In an April 2025 post, the company's Ryan VanGrack argued the orders singled out one provider while residents could stake through other platforms. Coinbase put forgone rewards across the four restricted states at more than $130 million as of October 2025.

Four states remain. California, Maryland and Wisconsin continue to bar new staking on Coinbase while their cases proceed; Washington permits staking but is pursuing a $4 million fine. Coinbase estimates California residents have missed more than $89 million in rewards since 2023.

The decision lands as federal policy has shifted without settling. The SEC has withdrawn from the registration-based cases it brought in 2023, and 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, which is why the staking cases have outlived the federal one by more than a year and a half. A future SEC, or a future bureau chief in Trenton, could revisit the question.

This article first appeared on Bitcoin Magazine and was written by Micah Zimmerman.