Charles Esther
Coinbase has requested that a securities lawsuit filed by Oregon’s attorney general be heard in federal court.
The company argues that the lawsuit is a “copycat case” of a prior Securities and Exchange Commission (SEC) lawsuit and that it attempts to overstep state authority by entering the realm of federal law.
Coinbase Challenges Oregon Attorney General’s Lawsuit
On June 2, Coinbase filed a motion in a Portland federal court challenging Oregon Attorney General Dan Rayfield’s April lawsuit.
Rayfield’s suit accuses Coinbase of selling unregistered securities to residents of Oregon.
Coinbase contends this lawsuit duplicates the SEC’s 2023 lawsuit against the exchange, which alleged unregistered securities sales.
The SEC dropped its case against Coinbase in February, along with several other crypto cases, during the Trump administration.
Coinbase Criticizes Oregon’s Approach
Coinbase criticized Rayfield’s lawsuit, stating that the Oregon attorney general is “dissatisfied with the federal government’s recent enforcement decisions” and is trying to shape digital asset regulations according to his own terms and timing.
Attorney General’s Justification for the Lawsuit
Attorney General Rayfield justified his lawsuit by saying Coinbase sold high-risk investments without proper vetting to protect consumers.
He claimed the unregistered securities are susceptible to pump-and-dump schemes and fraud.
Coinbase’s Attempt to Negotiate
In response, Coinbase said it attempted to meet with Rayfield after receiving notice of the impending lawsuit but was refused a meeting.
Coinbase Legal Officer Highlights Federal Issues
Coinbase’s chief legal officer, Paul Grewal, posted on June 3 that Oregon’s claims involve “fundamentally federal issues,” such as the definition of “investment contract,” and argued these issues belong in federal court.
State Enforcement to Fill Federal Void
Rayfield, meanwhile, expressed that his action against Coinbase was necessary because the SEC dropped its case and reassigned its top crypto litigator after Donald Trump became president.
He insisted that states need to “fill the enforcement vacuum” left by federal regulators stepping back under the new administration.
Other States Drop Lawsuits Against Coinbase
In recent months, several states, including Kentucky, Vermont, and South Carolina, have dropped their lawsuits against Coinbase, leaving Oregon among the few still pursuing legal action.
