Coinbase underscores that staking is not classified as a security under SEC guidelines, which consider protocol staking activities outside securities regulations.

The company plans to expand its staking services nationwide beyond New York, leveraging the new regulatory clarity.

Armstrong publicly advocated for broader regulatory reforms on social media, urging states like California, Wisconsin, New Jersey, and Maryland to enable wider access to staking services.

Coinbase has announced that residents of New York can now stake cryptocurrencies such as Ethereum, Solana, and Cardano on its platform following regulatory approval, marking a significant development in one of the most regulated US crypto markets.

This approval was facilitated by New York Governor Kathy Hochul, whose administration provided clearer regulatory guidance, helping to pave the way for this milestone.

The move signals a potential easing of regulatory barriers for crypto staking across the US, which could lead to increased adoption and legal clarity for similar services in other jurisdictions.

Coinbase emphasizes that its staking service is distinct from securities, as it facilitates network participation rather than pooling assets for profit, a stance supported in various legal challenges in states like Illinois, Kentucky, and South Carolina.

This development follows the dismissal of several lawsuits against Coinbase in 2023 by state regulators in South Carolina, Alabama, Kentucky, Vermont, and Illinois, which had accused the company of securities law violations.

Coinbase highlights that residents in states such as California, New Jersey, Maryland, and Wisconsin have missed out on over $130 million in staking rewards due to existing bans, and hopes this regulatory change will influence policy shifts in those states.

Coinbase CEO Brian Armstrong welcomed the regulatory change, emphasizing that it recognizes crypto staking as outside the scope of securities and called on other states to reconsider their legal barriers.

Crypto staking involves locking up proof-of-stake cryptocurrencies like Ethereum and Solana to verify transactions and secure networks, earning rewards in the process.

This move is credited to clearer regulatory guidance from Governor Hochul’s administration, which has historically maintained a strict stance on digital assets under the BitLicense regime.