Ethereum News Today: Regulatory Clarity Fuels Coinbase's New York Staking Expansion

Coinbase has launched crypto staking services for New York residents following regulatory approval, marking a significant milestone for the exchange after years of legal and regulatory hurdles in the state. The move, announced on October 8, 2025, allows users to stake Ethereum (ETH), Solana (SOL), Cosmos (ATOM), Cardano (ADA), Avalanche (AVAX), Polygon (MATIC), and Polkadot (DOT) directly through the platform, with rewards paid in the respective network's native tokens . Governor Kathy Hochul's administration cited the approval as a step toward financial inclusion, ending a restriction that had previously excluded New Yorkers from staking opportunities available to most other Americans . The service now extends Coinbase's staking program to 46 U.S. states, with California, New Jersey, Maryland, and Wisconsin remaining the only jurisdictions where staking is still prohibited .

The approval follows a series of legal victories for Coinbase, including the dismissal of cases in Illinois, Kentucky, and South Carolina, which had accused the exchange of offering unregistered securities through its staking services. The company has consistently argued that staking-as-a-service does not constitute a security, a stance supported by recent U.S. Securities and Exchange Commission (SEC) staff guidance clarifying that liquid staking arrangements, such as receipt tokens like stETH, are not securities transactions . This regulatory clarity has bolstered institutional confidence, with Grayscale recently launching U.S.-listed spot crypto ETFs with staking capabilities. In October 2025, Ethereum and Solana ETFs attracted $1.48 billion and $707 million in inflows, respectively, during their first week .

New York's decision to permit staking comes amid broader regulatory shifts in the crypto sector. The SEC's August 2025 guidance, combined with Coinbase's state-level legal wins, has created a more favorable environment for staking products. However, challenges persist. New Jersey and Washington State have maintained active lawsuits against Coinbase, while California regulators continue to enforce a statewide ban on staking-as-a-service. Coinbase estimates that residents in the four holdout states have collectively missed over $130 million in staking rewards since 2023 . The company's Chief Legal Officer, Paul Grewal, has called for federal legislation to replace the fragmented state-by-state enforcement framework, emphasizing the need for a unified regulatory approach .

The approval also highlights Coinbase's strategic expansion beyond its core exchange services. The firm secured custodian roles for eight of the top 11 U.S. Bitcoin ETFs, generating $43 million in revenue during the fourth quarter of 2024. Its recent $2.9 billion acquisition of crypto derivatives platform Deribit further diversifies its revenue streams, reducing reliance on trading fees tied to Bitcoin price volatility. Meanwhile, the launch of staking in New York aligns with broader institutional adoption trends, as seen in South Carolina's introduction of the Strategic Digital Assets Reserve Act, which proposes allocating up to 10% of state funds into cryptocurrencies .

New York's regulatory shift has positioned Coinbase as a key player in normalizing staking as a legitimate yield-bearing mechanism. While custodial staking on platforms like Coinbase offers convenience, it also raises concerns about asset control and security compared to non-custodial alternatives. The exchange's move underscores the growing acceptance of staking in mainstream finance, particularly as regulatory clarity and institutional participation increase. Analysts note that the approval could pressure other restrictive states to reassess their policies, potentially expanding access to staking for millions of Americans .

Source: [1] Cryptonews.com (https://cryptonews.com) [2] Coin360.com (https://coin360.com) [3] CoinCentral.com (https://coincentral.com) [4] Techstory.in (https://techstory.in)