Oregon AG Sues Coinbase for Allegedly Promoting High-Risk Crypto Investments

After building trust with Oregon consumers, Coinbase sold high-risk investments without them being properly vetted to protect consumers.

Oregon's state Attorney General is suing Coinbase, the top US-based crypto exchange, in order to fill a regulatory void left by the Trump administration, according to a new release.

The state AG, Dan Rayfield, is alleging that Coinbase (NASDAQ:COIN) promoted and sold high-risk investments to residents of Oregon without proper disclosures, and ultimately defrauded them.

“After building trust with Oregon consumers, Coinbase sold high-risk investments without them being properly vetted to protect consumers, and advertised those investments in a way designed to increase demand for the products and services with no regard for the consequences to consumers,” Rayfield said in a statement.

“Oregonians lost money, and we believe Coinbase should be held accountable and take steps to protect consumers going forward.

“We also know that investors have a right to understand the risks involved in any investment, especially a risky, speculative one.

“You don’8lipes going in for a medical procedure without knowing the risks. It’s the same for everyday folks who want to invest in cryptocurrency. I am committed to protecting Oregon’s investors so they’re not taken advantage of.”

The U.S. Securities and Exchange Commission (SEC) has since stopped pursuing many high-profile crypto enforcement actions since Trump took over. The SEC dropped its case, which included many of the same allegations as Rayfield’s lawsuit, in February.

Rayfield is also highlighting the fact that many of the assets listed by Coinbase have since crashed drastically in value. For example, he pointed out that Internet Computer (ICP) has lost 99% of its value since being listed on Coinbase.

Coinbase almost immediately issued a response, taking the offensive in a blog post to blast the lawsuit.

“Today, a state attorney general decided to copycat an earlier federal case and file suit against Coinbase, despite the fact that Coinbase has been actively working in good faith with the administration to register with the SEC,” the company said.

Chief legal officer Paul Grewal also called the lawsuit a “copycat” and an “embarrassing waste” of Oregon taxpayer money.

"It’s no secret that the crypto industry is quickly innovating and that regulators are struggling to keep pace. We’ve said before that we prefer to work with regulators in a spirit of cooperation and collaboration, not litigation, to create clear rules of the road for the industry to follow." Grewal added.