New Jersey Withdraws Its Staking Ban on Coinbase as Crypto Faces a Midterm Test

New Jersey’s securities regulator has cancelled its 2023 order against Coinbase’s staking product, ending a restriction that kept residents from staking new funds for more than three years. A notice dated Oct. 30 and signed by Acting Bureau Chief Keith A. Alt also dropped the $5 million penalty. It was withdrawn without prejudice and without any ruling on the merits, so the Bureau of Securities could still file a new action later. Coinbase revealed the change in its third quarter filing, and CEO Brian Armstrong said New Jersey users will get staking back very soon.

States Still Pursuing Coinbase Over Staking

California, Maryland, Wisconsin and Washington have not dropped their cases. California led the ten-state group behind the 2023 actions, which covered over 600,000 accounts. California, Wisconsin and Maryland blocked new staking while their cases ran, whereas Washington allows it but seeks a $4 million fine. Coinbase estimates Californians have lost more than $89 million in rewards since 2023, compared with over $15 million in New Jersey.

Crypto Policy and the US Midterm Elections

The reversal arrives right before the Nov. 3 vote, with prediction markets leaning toward Democrats taking the Senate. That would put Elizabeth Warren, a vocal crypto critic, in line to lead the Senate Banking Committee, while Republican supporter Cynthia Lummis retires in January 2027. New Jersey’s change came under Governor Mikie Sherrill, who backed both the CLARITY and GENIUS bills as a House member. Senator Cory Booker helped shape market structure legislation but opposed advancing CLARITY in September.

Industry Push for Bipartisan Support

Fairshake and its affiliated super PACs are supporting 19 Republicans and 14 Democrats in House races, and Josh Gottheimer has also received industry backing. Lawmakers with an A rating from Stand With Crypto now number 332, up from 96 when the group launched in 2023.