New Jersey rescinds its Coinbase staking ban and $5 million fine; coin prices halved the staking revenue
New Jersey has rescinded the 2023 order that called Coinbase's staking an unregistered security, wiping a $5 million penalty and the ban on residents staking new funds. The win rules on nothing and can be revisited, and the staking line has halved on falling coin prices, not legal blocks.
Richard Tang · 3 min read
New Jersey has handed Coinbase−4.58% — Coinbase, down 4.58 percent today back its staking business, the service that locks up customers' coins to run blockchains and pays them new tokens for it 1. On October 30 the state's Bureau of Securities rescinded its June 2023 order calling that service an unregistered security, wiping out a $5 million penalty and the ban that kept residents from staking new funds 1.
The win is real and thin: the order rules on nothing, and because it is without prejudice, New Jersey can sue again 1. What limits Coinbase's staking revenue today is not the courtroom; it is the coin price.
The bans are lifting on guidance, not statute
The June 2023 order cut 145,270 New Jersey residents off from staking new funds 1. Coinbase then halted the service in four more states 1. The federal side folded first: the SEC dropped its Coinbase suit in February 2025 1, and in March 2026 it issued guidance saying staking does not meet the definition of a security 2. Five states dropped their cases during 2025; California, Maryland and Wisconsin still bar new staking, Washington's action remains open, and chief legal officer Molly Abraham named all four as next 1.
What returns is permission on paper, not in law: the Clarity Act, which would have split crypto oversight between the SEC and the CFTC, failed in the Senate in September, and the SEC's staking positions are staff guidance a future administration could withdraw 3. The wait also cost money. New Jersey users alone are estimated to have missed $15 million in rewards 4. Across every blocked state, Coinbase put the missed total at $90 million as of April 2025 1.
Prices, not bans, now set the staking line
Blockchain rewards, mostly staking, brought Coinbase $85.7 million in the third quarter, down from $184.6 million a year earlier 1. The company ties $111.8 million of that decline to lower Solana and Ethereum prices 1. And the quarter just reported is the tell: rewards rose 3% from the second quarter while every state ban was still in force 5. The line no longer tracks the court docket; it tracks the price of the coins being staked.
Coinbase spent three years winning back permission to run a business that coin prices cut in half while it waited.
Coinbase's revenue has followed crypto prices down since late 2024
Data
| Total revenue | |
|---|---|
| Q4 '23 | $0.95B |
| Q1 '24 | $1.64B |
| Q2 '24 | $1.45B |
| Q3 '24 | $1.21B |
| Q4 '24 | $2.27B |
| Q1 '25 | $2.03B |
| Q2 '25 | $1.5B |
| Q3 '25 | $1.87B |
| Q4 '25 | $1.78B |
| Q1 '26 | $1.41B |
| Q2 '26 | $1.22B |
| Q3 '26 | $1.22B |
Watch the states for permission, the prices for the earnings
The market has already chosen its variable. The shares fell 10.6% the day after third-quarter results 6. On November 2 Morgan Stanley+0.58% — Morgan Stanley, up 0.58 percent as of its last quote cut Coinbase to Sell from Hold with a $120 target, saying the earnings recovery looks weaker than it previously anticipated 7.
Chief executive Brian Armstrong, meanwhile, adopted a prearranged plan to sell up to 8.2 million shares, with an estimated start of November 16 6. The sales go through only if the share price clears thresholds the filing does not disclose 6.
Clearing the last four states is still worth Coinbase's time: it costs little and ends the question nationally. But the binding constraint on the staking line is no longer permission. It is the price of Solana and Ethereum.
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