Crypto Journalist
Anas Hassan
Crypto Journalist
Anas Hassan
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Coinbase has activated staking services for New York residents, allowing users to earn yields on Ethereum and Solana holdings for the first time.
The rollout follows approval from state regulators under Governor Kathy Hochul’s administration, ending a restriction that had separated New Yorkers from staking opportunities available to most other Americans.
New York users can now stake ETH, SOL, and other supported assets directly through the platform, with rewards earned in the network’s native tokens.
New York Joins Shrinking List of States Where Staking Remains Restricted
Coinbase estimates that residents in California, New Jersey, Maryland, and Wisconsin have collectively missed more than $130 million in staking rewards due to state-level bans still in effect.
The exchange framed New York’s decision as a policy shift that could influence other states, though several jurisdictions continue to maintain restrictions on staking-as-a-service products.
Throughout its legal battles, Coinbase has maintained that staking as a service does not constitute security, a position the company says is supported by recent SEC staff guidance and multiple state case dismissals.
Vermont, Illinois, Kentucky, Alabama, and South Carolina have all dropped their staking-related cases against the exchange, contributing to what Coinbase describes as an emerging national consensus.
Chief legal officer Paul Grewal has repeatedly called for federal legislation to replace what he characterizes as a patchwork of state-by-state enforcement actions.
Coinbase originally paused staking services in California, New Jersey, South Carolina, and Wisconsin in July 2023 after the SEC filed a lawsuit alleging the exchange offered unregistered securities.
Ten state regulatory bodies joined the enforcement wave, though only four jurisdictions required Coinbase to suspend new staking deposits while legal proceedings continued.
Illinois confirmed plans to drop its lawsuit on April 3, 2025, following Kentucky’s dismissal filing on April 1 and South Carolina’s withdrawal on March 27.
However, representatives for New Jersey’s Bureau of Securities and Washington State’s securities administrator have confirmed that their cases remain active, indicating that the legal issues have not been fully resolved.
Meanwhile, South Carolina’s withdrawal came alongside the state’s introduction of the Strategic Digital Assets Reserve Act, which proposes allocating up to 10% of certain funds into cryptocurrencies, including Bitcoin.
Staking Approvals Came Amid Improving Regulations Across U.S. Crypto Markets
The SEC published guidance in August 2025 clarifying that certain liquid staking arrangements, including receipt tokens like stETH, do not constitute securities transactions.
Sam Kim, chief legal officer of Lido Labs Foundation, described the guidance as “the much-needed guidance that Lido and the wider industry have needed” that would encourage institutional participation from investors previously deterred by legal uncertainty.
Legal experts suggest the SEC’s position on staking receipts may influence future considerations around wrapped tokens and cross-chain bridges that rely on similar derivative representations.
Building on this regulatory momentum, Grayscale launched the first U.S.-listed spot crypto ETFs with staking capabilities on October 6, enabling the feature for its Ethereum Mini Trust ETF, Ethereum Trust ETF, and Solana Trust.
ETF analyst Eric Balchunas reported record inflows of $5.95 billion into digital asset investment products during the first week of October, with Ethereum attracting $1.48 billion and Solana drawing $707 million.
Against this backdrop, Coinbase faces mounting competition from both traditional finance institutions and emerging crypto platforms as it expands beyond pure exchange services into custody, derivatives, and stablecoin operations.
The company secured custodian roles for eight of the top 11 U.S. Bitcoin ETFs, generating $43 million in the fourth quarter of 2024 from that business line alone.
Its recent acquisition of crypto derivatives platform Deribit for $2.9 billion particularly diversifies revenue streams beyond trading fees, which remain tightly correlated to Bitcoin price volatility.
New York’s approval marks another jurisdiction where Coinbase can now offer staking services; however, residents of California, New Jersey, Maryland, and Wisconsin remain locked out of similar yield opportunities pending further regulatory action.
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