Oregon Attorney General Dan Rayfield has filed a lawsuit against Coinbase

Oregon Attorney General Dan Rayfield has filed a lawsuit against Coinbase, accusing the publicly traded crypto exchange of violating the state's securities law.

Oregon Attorney General Dan Rayfield has filed a lawsuit against Coinbase, accusing the publicly traded crypto exchange of violating the state’s securities law. The complaint claims that several digital assets available on Coinbase are unregistered securities.

The lawsuit, announced on April 18, is part of an effort by the Oregon Department of Justice to address a lack of enforcement by federal agencies. “States must fill enforcement vacuum being left by federal regulators who are abandoning these cases under Trump administration,” the department said.

Coinbase’s Chief Legal Officer Paul Grewal responded on April 21, expressing his frustration in a post on X. Justin Slaughter, Vice President of Regulatory Affairs at Paradigm, noted that the complaint lists several tokens, including Aave, Avalanche, Uniswap, Near Protocol, and wLUNA, but not LUNA.

The complaint alleges that Coinbase made these assets available for trading through its main platform and Prime service, and that they qualify as securities under Oregon law. It does not explain the inclusion or exclusion of specific wrapped assets.

You may want to read at FinanceMagnates.com: SEC Drops Coinbase Lawsuit as Crypto Task Force Promises Regulatory Clarity.

Coinbase Faces Oregon Lawsuit for Securities Violations

The lawsuit, filed in the Circuit Court for the State of Oregon, names Coinbase and its CEO, Brian Armstrong, as defendants. It claims that Coinbase violated the Oregon Securities Law by offering and selling unregistered securities to the public.

The complaint focuses on several digital assets, including Aave, Avalanche, Axie Infinity, Balancer, Band Protocol, Batrix Token, Boba Network, Chainlink, Compound, Counterparty, dHedge, DeepBrain Chain, Elliptic Labs, Flow, and Flexible Spending Accounts.

Other assets mentioned in the complaint include:

*Keep in mind that some of the assets listed in the complaint are not necessarily available for trading on Coinbase’s U.S. platform. For example, the complaint mentions LUNA, which was delisted by Coinbase in February 2022. It's possible that some of the assets mentioned in the complaint are only available for trading on Coinbase’s international platforms or through its Prime brokerage service, which caters to institutional investors.

The complaint further alleges that Coinbase was aware of its legal obligations but chose to disregard them in order to maximize its profits. It claims that Coinbase’s actions have harmed investors who were not fully informed of the risks involved in investing in these digital assets.

“We are filing this lawsuit to hold Coinbase accountable for its actions and to protect investors in Oregon,” said Attorney General Rayfield. “Coinbase knew the rules and chose to break them. We will not stand for it.”

The lawsuit seeks injunctive relief, restitution for defrauded investors, and civil penalties. It also requests that the court order Coinbase to register its securities offerings with the state of Oregon.

Coinbase Adds XRP Futures After Lawsuit

The lawsuit comes as no surprise, given that the U.S. Securities and Exchange Commission (SEC) has been actively pursuing cases against crypto exchanges for allegedly selling unregistered securities. Earlier this year, the SEC sued both Coinbase and Binance for allegedly violating securities law. However, the SEC later dropped its case against Coinbase after a federal judge ruled that the agency had failed to provide sufficient notice to the exchange before filing the lawsuit.

The SEC’s actions have been met with mixed reactions. Some legal experts have argued that the SEC is overstepping its bounds by trying to regulate cryptocurrencies so strictly. Others have said that the SEC’s actions are necessary to protect investors from fraud.

A ruling that these assets are securities would not create binding precedent, even within Oregon, according to Yarden Noy, partner at DLT Law. However, he noted that the decision could still be used in arguments by regulators and plaintiffs.

The complaint also does not explain the inclusion or exclusion of specific wrapped assets.

The lawsuit is pending in the Circuit Court for the State of Oregon. It remains to be seen how the court will rule on the case and what the implications will be for the cryptocurrency industry.

The DEOJ said it is also investigating other crypto companies and will continue to take action against any company that violates state securities law.

The post Oregon AG Files Lawsuit Against Coinbase, Accuses Deceptive Practices and Unregistered Securities Offerings appeared first on iFXR Magazine.