New Jersey drops Coinbase staking order ahead of crypto’s midterm test

New Jersey’s securities regulator has rescinded its 2023 cease-and-desist order against Coinbase’s staking service, lifting a ban that stopped residents staking new funds on the exchange for over three years.

The Oct. 30 notice, signed by Acting Bureau Chief Keith A. Alt, withdrew the order and its $5 million penalty without prejudice and without a ruling on the merits. The wording leaves the Bureau of Securities free to bring a fresh enforcement action against Coinbase in the future. 

Coinbase disclosed the move in its third-quarter filing, stating the regulator informed the company on Oct. 29 of its plan to rescind. CEO Brian Armstrong said New Jersey users would regain staking access “very soon”. 

California, Maryland, Wisconsin and Washington are still pursuing enforcement actions against the exchange with cases against the its staking services. 

Staking involves committing cryptocurrency to help validate transactions and secure a blockchain in exchange for rewards. Companies like Coinbase handle the process for customers and take a share of the rewards as a fee.

The last holdouts

California led the ten-state task force behind the 2023 actions, which covered more than 600,000 accounts held by Californians.