Coinbase has renewed its call for California to lift its ban on retail crypto staking, saying the policy has cost users in the state an estimated $110 million in lost rewards since 2023.
The exchange launched its "Bring Back Staking in CA" campaign, urging California's Department of Financial Protection and Innovation (DFPI) to end what it calls a "misguided staking ban."
Staking lets crypto holders lock up their tokens to help validate transactions and secure a blockchain network. In return, they earn rewards, similar to earning interest for supporting the network. It's a core feature of proof-of-stake blockchains such as Ethereum, Solana and Cardano.
Related: What is staking? Explained
Coinbase launches "Bring Back Staking in CA" campaign
Coinbase says the restriction, imposed on June 6, 2023, prevents Californians from using its staking service. even though users in 46 other states continue to earn rewards without issue.
"California deserves the same access that 46 other states have," Coinbase wrote . "Staking isn't a security. No one has ever lost assets by staking on Coinbase. Californians have already missed out on $110M in potential rewards since 2023. Time for change."\\
The campaign's landing page states :
"Since June 6, 2023, California has banned crypto holders like you from staking through Coinbase. Millions of users across nearly every other state use Coinbase's staking services to earn rewards—and no user has ever lost assets through them. Yet California continues to fight to prevent their citizens from staking."
More on Staking:
The legal roots of California's staking ban
Coinbase attributes the restriction to a desist and refrain order issued by the California Department of Financial Protection and Innovation (DFPI) in mid-2023, which alleged that the company's staking rewards program violated state securities law.
In June 2023, the DFPI formally took action against Coinbase's staking program, concluding that the way it was offered in California violated the state's securities laws.
According to the DFPI's press release, the regulator issued an enforcement action citing violations of securities laws and corresponding penalties in connection with Coinbase's staking rewards program.
The DFPI determined that Coinbase had been offering its staking rewards accounts to California residents without first qualifying the offer under state law as required for securities.
The agency explained that Coinbase 'pools investors' crypto assets, operated validator nodes to generate staking rewards, and shared profits with customers" — actions which, in the regulator's view, meant the staking product needed to be qualified like a securities offering under California law.
However, the DFPI clarified that its action did not ban staking altogether. Instead, it blocked Coinbase from offering its custodial staking program in California until it met state qualification requirements under securities statutes. The regulator said qualifying a securities offering is intended to ensure investors "receive all material information needed to evaluate the risks of participating in an investment, including in a staking rewards program."
In its regulatory filings, including a Notice of Intent, the DFPI reported that as of March 2023, there were at least 644,470 California residents actively participating in Coinbase's staking offerings, representing more than $1.28 billion in combined holdings.
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Why California remains one of the most inflation-hit U.S. states in 2025
California continues to experience higher price growth than most U.S. states in 2025, even as national inflation moderates.
According to the California Legislative Analyst's Office (LAO), consumer prices in the state rose about 3.3% between August 2024 and August 2025, compared with roughly 2.9% nationally.
Economists point to several structural factors driving the gap.
First, housing and service costs remain elevated, with rent, healthcare, and transport prices climbing faster in the Pacific region than the U.S. average, the LAO and regional Consumer Price Index (CPI) data show.
Second, research from the Federal Reserve Bank of San Francisco notes that states with already high living costs before the pandemic, including California, have seen larger absolute price increases since 2021, even when inflation rates appear similar elsewhere.
Finally, California's tight housing supply and high baseline expenses magnify the effect of every new price hike, leaving many households feeling persistent pressure despite easing national figures.
In short, while inflation across the U.S. is cooling, California's combination of expensive housing, strong demand for services, and higher-than-average wages keeps it among the most inflation-affected states in 2025, according to the LAO and Federal Reserve data.
Related: Inflation-troubled Americans wants free crypto this Christmas
This story was originally published by TheStreet on Dec 15, 2025, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
