Ethereum News Today: SEC Backs Coinbase's New York Staking Amid State Legal Battles

Coinbase has launched staking services for New York residents, enabling them to earn yields on cryptocurrencies like Ethereum (ETH) and Solana (SOL) following regulatory approval from the state. This move marks a significant milestone for the exchange, which had previously been restricted in one of the country's most stringent crypto markets. New York users can now stake ETH, SOL, and other supported assets directly through Coinbase, with rewards distributed in the network's native tokens. The rollout follows the dismissal of state-level lawsuits against Coinbase in multiple jurisdictions and aligns with recent Securities and Exchange Commission (SEC) guidance clarifying that staking activities on proof-of-stake (PoS) networks do not constitute securities transactions .

The approval in New York comes as Coinbase continues to expand its staking program to 46 states, leaving only California, New Jersey, Maryland, and Wisconsin without access to the service. The exchange estimates that residents in these four states have collectively missed over $130 million in staking rewards since 2023 due to ongoing legal restrictions. Coinbase attributes this disparity to a "patchwork" of state-by-state enforcement actions, which it argues hinder consumer access to yield-generating opportunities. The company has consistently maintained that staking-as-a-service does not meet the definition of a security, a position bolstered by the SEC's August 2025 staff guidance and the dismissal of cases in states like South Carolina, Alabama, and Kentucky .

The SEC's clarification has been a pivotal development for the crypto industry, providing much-needed legal certainty around staking activities. The guidance explicitly states that protocol staking-where users validate transactions on PoS networks-does not involve the offer or sale of securities, distinguishing it from speculative or investment-like arrangements. This framework has enabled platforms like Grayscale to introduce staking features in its Ethereum and Solana exchange-traded funds (ETFs), signaling growing institutional confidence in compliant staking models . Coinbase CEO Brian Armstrong hailed New York's approval as a "progress in NY" and called on other states to "drop their lawsuits and catch up," emphasizing that staking services should not be treated as securities .

The financial implications of staking access are substantial. For example, Cosmos (ATOM) currently offers staking yields exceeding 16% annual percentage yield (APY), while Ethereum staking returns hover around 1.9% APY. Coinbase's expansion into New York also positions it to compete more effectively with traditional financial institutions and emerging crypto platforms. The exchange recently secured custodian roles for eight of the top 11 U.S. Bitcoin ETFs and acquired Deribit, a crypto derivatives platform, for $2.9 billion, diversifying its revenue streams beyond trading fees .

Despite regulatory progress, challenges persist. New Jersey and Washington state have yet to dismiss their cases against Coinbase, and legal uncertainty in these jurisdictions continues to delay staking access for residents. Additionally, the SEC's guidance does not fully resolve ambiguities around liquid staking or restaking derivatives, which remain subject to regulatory scrutiny. Coinbase's Chief Legal Officer, Paul Grewal, has reiterated calls for federal legislation to harmonize crypto regulations, arguing that the current state-by-state approach creates compliance burdens for businesses and limits innovation in PoS technologies .

The broader market response to Coinbase's expansion has been positive. Record inflows into crypto investment products in October 2025, including $1.48 billion into Ethereum-related products, highlight growing demand for staking opportunities. As Coinbase aims to restore parity for New Yorkers, the company faces mounting competition from platforms offering staking services, custody solutions, and stablecoin operations. The exchange's ability to navigate regulatory hurdles while expanding its financial services ecosystem will be critical to maintaining its market position in an increasingly competitive landscape .