Coinbase Fights Oregon Over 31 Unregistered Securities

Coinbase, a leading U.S.-based cryptocurrency exchange, is currently engaged in a legal dispute with the Oregon Attorney General over allegations of selling 31 unregistered securities, including major tokens such as XRP, Solana, and UNI. The company has filed a petition with a federal court to take over the jurisdiction of the lawsuit, arguing that the state's actions interfere with federal efforts to clarify digital asset regulations.

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. 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."

The central theme in many crypto regulatory battles, including the Coinbase lawsuit in Oregon, is the classification of digital assets as unregistered securities. This legal dispute underscores the broader regulatory challenges faced by the cryptocurrency industry, as different jurisdictions grapple with how to classify and regulate digital assets. The outcome of this lawsuit could set a precedent for future regulatory actions and shape the landscape of digital asset oversight in the United States.