Coinbase Wins New Jersey Staking Fight, but Four States Still Stand in the Way

TLDR

• New Jersey dropped its 2023 lawsuit against Coinbase over its staking program.
• The state also lifted a cease-and-desist order, so residents can earn staking rewards again.
• Wisconsin, Maryland, California, and Washington still have staking restrictions or disputes with Coinbase.
• Morgan Stanley downgraded Coinbase to Underweight and cut its price target from $258 to $120.
• The Coinbase Premium Index has stayed negative for 39 days in a row.

Coinbase customers in New Jersey can earn staking rewards again after state regulators dropped a lawsuit that had blocked the service since 2023. The decision removes one state from a short list of places where the exchange still faces limits on staking.

Molly Abraham, Coinbase’s vice president of legal, shared the news on social media. She said New Jersey also lifted a cease-and-desist order that had stopped the company from offering staking to residents.

Staking lets users lock up certain digital assets to help run a blockchain network. In return, they earn rewards paid in crypto.

How the New Jersey Case Started

New Jersey’s Bureau of Securities took action against Coinbase in 2023. The state claimed the exchange’s staking program was an unregistered securities offering.

Regulators argued that Coinbase should have registered its staking-as-a-service program under state securities laws. Because of the case, eligible New Jersey residents could not join the program or earn rewards on their holdings.

With the lawsuit dismissed and the order lifted, Coinbase can now bring staking back for those customers. The case lasted about three years before it ended.

Faryar Shirzad, Coinbase’s chief policy officer, welcomed the outcome. He called it an important step for staking access across the United States.

The company said its work is not finished. Wisconsin, Maryland, California, and Washington are still among the states where staking restrictions or disputes need to be resolved.

Coinbase Stock and Market Data

The legal win arrived as Coinbase shares came under pressure. The stock traded at $137.83 at press time after falling 3.98%.

Morgan Stanley recently downgraded Coinbase from Equalweight to Underweight. The bank also cut its price target from $258 to $120.

Analyst Michael Cyprys pointed to falling confidence in an earnings recovery, weaker trading activity, and a softer revenue outlook. He also cited uncertainty in the crypto market.

The bank lowered its 2027 revenue forecast for Coinbase by 28%. It cut its adjusted EBITDA forecast for the same year by 47%.

The downgrade followed Coinbase’s third-quarter 2026 results. The exchange reported net income of $719 million, up from $433 million in the same quarter last year.

Coinbase has also gained ground in tokenized stocks. Data from Token Terminal shows it ranked second among tokenized stock issuers by decentralized exchange trading volume over the past seven days.

Coinbase’s tokenized assets made up 26.7% of total trading volume in that period. Robinhood held the top spot with 27.3%.

Demand for Bitcoin on the platform has been weaker. The Coinbase Premium Index has stayed negative for 39 days in a row, which means Bitcoin has traded at a lower price on Coinbase than on global exchanges.

On October 30, the index fell to -0.2682% after the Binance hack. At press time, it remained negative at -0.1847%, according to Coinglass data.

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