Coinbase Challenges Oregon's Unregistered Securities Lawsuit

Coinbase has filed a petition with a federal court to take over the jurisdiction of a lawsuit initiated by the Oregon Attorney General. The lawsuit accuses Coinbase of selling unregistered securities, a claim that Coinbase argues is an overreach by the state and interferes with federal efforts to clarify digital asset regulations.

In its filing, Coinbase contends that the lawsuit represents a "regulatory land grab" by the Oregon Attorney General, who is dissatisfied with recent federal enforcement decisions. The company asserts that the state's actions conflict with ongoing bipartisan efforts at the federal level to establish clear regulations for digital assets. Coinbase further argues that Oregon's lawsuit ignores these federal efforts and improperly attempts to create independent state-level oversight of digital asset platforms.

The Securities and Exchange Commission (SEC) had previously dropped its enforcement action against Coinbase in February, weeks after the inauguration of President Donald Trump. Coinbase had made a $1 million donation to Trump's inaugural committee. Coinbase's Vice President of Legal, Ryan VanGrack, emphasized that Oregon's lawsuit is an attempt to revive claims that were previously dismissed by federal regulators. He stated, "What you have here is Oregon, and only Oregon, trying to revive the SEC case, which was dismissed with prejudice."

VanGrack also pointed out that the Oregon Attorney General might not even have the authority to file the case, as Oregon-based securities transactions are generally regulated by the Division of Financial Regulation, not the Attorney General. Coinbase argues that the Attorney General is attempting to stretch his enforcement authority beyond its limits to establish himself as the overseer of crypto in Oregon and beyond.

VanGrack rejected the idea that Oregon’s lawsuit is a straightforward partisan issue, instead highlighting that states of various political leanings have dropped or not pursued similar actions. He mentioned Vermont, Kentucky, and Illinois as examples of states that have dismissed crypto-related litigation, regardless of their political leanings. VanGrack suggested that Oregon’s action is an outlier driven by the specific motivations of its Attorney General, rather than partisan politics.

VanGrack concluded that the motivations for the lawsuit are transparent and not about the law or helping Oregonians, but rather about politics and grabbing headlines at Oregon's expense. Coinbase has pledged to vigorously defend its position and has no intention of voluntarily exiting Oregon’s market unless required to do so. VanGrack affirmed, "We are going to fight, because what Oregon has done is wrong."