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

New Jersey has lifted its ban on staking services and dropped a $5 million penalty, allowing Coinbase to resume staking access for its US users. The state's securities regulator rescinded its cease-and-desist order against Coinbase's staking service, ending a ban that prevented residents from staking new funds on the exchange for over three years.

The decision was made by Acting Bureau Chief Keith A. Alt on October 30, and the wording allows the Bureau of Securities to bring future enforcement actions against Coinbase. Coinbase released the news in its third-quarter filing, stating that the regulator informed the company of its plan to rescind on October 29. CEO Brian Armstrong announced that New Jersey users would regain staking access "very soon."

Meanwhile, other states such as California, Maryland, Wisconsin, and Washington are still pursuing enforcement actions against the exchange, with cases against its staking services. Staking involves users committing cryptocurrency to help validate transactions and secure a blockchain, with companies like Coinbase handling the process for customers and taking a share of the rewards as a fee.

The reversal comes ahead of the November 3 US midterm elections, when a Democratic Senate majority could have far-reaching implications for the crypto industry.