New York Embraces Crypto Staking with Coinbase Approval

After a period of restriction, New York residents can now stake Ethereum (ETH) and Solana (SOL) on Coinbase, earning rewards in native tokens. This follows approval from state regulators under Governor Kathy Hochul's administration, marking a significant shift in the state's approach to crypto.

A Shifting Landscape for Staking in the US

New York joins a growing number of states embracing staking, although restrictions remain in California, New Jersey, Maryland, and Wisconsin. Coinbase estimates that residents in these states have collectively missed out on substantial staking rewards due to ongoing state-level bans.

Coinbase has been actively engaged in legal battles, arguing that staking-as-a-service does not constitute a security. They cite recent SEC staff guidance and successful case dismissals in states like Vermont, Illinois, Kentucky, Alabama, and South Carolina as evidence supporting their position.

Chief Legal Officer Paul Grewal advocates for federal legislation to create a consistent regulatory framework, replacing the current patchwork of state-by-state enforcement actions.

Regulatory Momentum and ETF Inflows

The SEC's clarification on liquid staking arrangements, particularly regarding receipt tokens like stETH, has provided much-needed guidance for the industry. This guidance, according to Lido Labs Foundation's Chief Legal Officer, Sam Kim, is expected to encourage institutional participation.

Grayscale's launch of spot crypto ETFs with staking capabilities further fuels the momentum, attracting significant inflows into digital asset investment products.

ETF analyst Eric Balchunas reported significant inflows into digital asset investment products in early October 2025. Ethereum and Solana experienced significant investments as a result of these ETFs.

Key Takeaways

• New York approves Coinbase staking: Residents can now earn rewards on ETH and SOL.
• Regulatory clarity improves: SEC guidance and case dismissals boost industry confidence.
• Competition intensifies: Coinbase faces challenges from both traditional finance and crypto platforms.

Coinbase has expanded beyond traditional trading, acquiring crypto derivatives platforms like Deribit, and securing custodial roles with a large number of Bitcoin ETFs.

While New York's approval is a positive step, regulatory hurdles remain in other states. The evolving regulatory landscape highlights the need for clear, consistent federal guidelines to foster innovation and protect investors.