Oregon Sues Coinbase Over Unregistered Crypto Securities

Tyler Winklevoss, co-founder of the Gemini digital asset exchange, has criticized Oregon’s Attorney General for his lawsuit against the crypto giant Coinbase. The lawsuit alleges that Ripple’s XRP and other crypto tokens are unregistered securities under Oregon state laws.

In an April 18 announcement, Oregon Attorney General Dan Rayfield stated that he had filed a lawsuit against Coinbase for allegedly offering XRP and 30 other digital assets as unregistered securities, in violation of state law. The Oregon Department of Justice claimed that this lawsuit is part of an effort to address a regulatory vacuum left by federal agencies during the Donald Trump administration.

Justin Slaughter, the vice president of regulatory affairs at a crypto investment firm, noted that the lawsuit includes a wide range of digital assets, claiming they are unregistered securities. The list of tokens mentioned includes popular altcoins such as Ripple’s XRP, Aave, Avalanche, Uniswap, and Near Protocol.

Gemini co-founder Tyler Winklevoss has expressed concerns about the validity of the case, citing a recent federal court ruling that declared XRP a non-security. Winklevoss suggested that the Oregon Attorney General should be impeached for wasting taxpayer money and defying the law.

Ripple, the blockchain payments firm behind XRP, has been involved in a lawsuit with the US Securities and Exchange Commission (SEC). The SEC contended that Ripple raised $1.3 billion via an unregistered securities offering of the XRP cryptocurrency. Ripple argued that XRP is a currency, not a security, and thus outside the SEC’s jurisdiction.

The SEC recently agreed to drop its appeal of a U.S. District Court Judge Analisa Torres’ 2023 ruling that Ripple’s programmatic sales of XRP to retail exchanges did not violate federal securities laws. Torres found that only Ripple’s institutional sales violated securities laws, ordering Ripple to pay a $125 million fine.

Ripple and the SEC have since requested the court to pause the case to finalize a deal to close their long-running legal dispute. In a significant victory for Ripple, the SEC will return the majority of the $125 million court-ordered fine paid by the firm last year, keeping just $50 million and returning the $75 million balance to Ripple.

This development highlights the ongoing debate over the regulatory status of digital assets in the United States. The lawsuit by Oregon’s Attorney General adds another layer of complexity to the legal landscape, as different jurisdictions and regulatory bodies grapple with how to classify and regulate cryptocurrencies.