Oregon Attorney General Files Lawsuit Against Coinbase, Reigniting Debate Over State Crypto Regulation
In a move reigniting legal tensions within the U.S. cryptocurrency industry, Oregon Attorney General Dan Rayfield has filed a securities enforcement lawsuit against Coinbase, several months after the U.S. Securities and Exchange Commission (SEC) dropped similar charges against the major crypto exchange.
The lawsuit, announced this week, alleges that Coinbase facilitated the sale of unregistered securities to Oregon residents, putting consumers at risk of financial loss through potentially fraudulent schemes, including pump-and-dump tactics. Rayfield’s office claims the company sold "high-risk investments" without sufficient safeguards.
“After building trust with Oregon consumers, Coinbase sold high-risk investments without them being properly vetted to protect consumers,” Rayfield said in a public statement. “Oregonians lost money, and we believe Coinbase should be held accountable.”
This state-level action comes after the SEC, under the Biden administration, dropped its case against Coinbase in February. The federal regulator had initially charged Coinbase in 2023 with operating as an unregistered broker, exchange, and clearing agency. The SEC also targeted Coinbase’s staking-as-a-service program as improperly registered. However, with leadership changes and shifting regulatory priorities, the federal case was ultimately abandoned.
Rayfield addressed the SEC’s withdrawal directly, arguing that the burden of enforcement now falls to states. “It is up to states to fill the enforcement vacuum being left by federal regulators who are giving up under the new administration,” he said, referencing the broader trend of the SEC dropping crypto investigations, including those involving OpenSea, Kraken, Consensys, and Uniswap.
Coinbase, for its part, has sharply criticized Oregon’s action. Chief Legal Officer Paul Grewal dismissed the lawsuit as politically motivated and regressive. “Oregon’s holdout campaign is obstruction for the sake of obstruction,” Grewal wrote in a blog post. “It is a desperate scheme that does nothing to move the crypto conversation forward, and in fact takes us a giant leap backwards from hard-won progress.”
Grewal also pointed to growing bipartisan momentum in Congress to pass comprehensive federal digital asset legislation. Recent months have seen both House and Senate committees advancing bills focused on regulating stablecoins and the broader crypto ecosystem, with former President Donald Trump expressing support for signing such legislation into law by August.
“Instead of waiting for Democrats and Republicans in Congress to enact clear rules of the road,” Grewal continued, “Oregon has taken it upon itself to try to regulate a worldwide industry through enforcement.”
As the tug-of-war between state and federal authorities unfolds, the case is likely to become a flashpoint in the evolving conversation about how—and who—should govern the rapidly growing digital asset space in the United States.