Oregon DOJ Sues Coinbase, Accusing the Exchange of Selling Unregistered Securities

Just when everyone thought the debate of “altcoin as securities” had extinguished after the SEC dropped several lawsuits against crypto firms this year

Just when everyone thought the debate of “altcoin as securities” had extinguished after the SEC dropped several lawsuits against crypto firms this year, the State of Oregon is hitting one of the most popular exchanges in the U.S. with a fresh legal challenge.

On Friday, Oregon State Attorney Dan Rayfield announced a lawsuit against Coinbase (NASDAQ:COIN) for allegedly violating the State’s securities laws. The complaint, filed in Multnomah County Circuit Court, claims Coinbase promoted and sold high-risk investments categorized as unregistered securities.

State Attorney Rayfield accused Coinbase of “building trust with Oregon consumers” before selling unregistered investment assets. “Oregonians lost money, and we believe Coinbase should be held accountable,’ he said.

The Oregon DOJ is highlighting the risks tied to unregistered securities, like the Internet Computer Protocol (ICP). When it launched on Coinbase, ICP started trading at a sky-high $700, but it quickly dropped to $72 in a month. Today, it stands at around $7, marking a 99% decline from its peak.

The DOJ argues that cases like this demonstrate how a lack of enforcement leaves everyday traders exposed to devastating losses in the crypto market.

Coinbase CLO Reacts

Coinbase’s CLO Paul Grewal reacted to the news of the lawsuit on Twitter. In the post, he compared Oregon’s lawsuit to the SEC filing, calling it a “copycat case” that reflects Gary Gensler’s broad approach to crypto regulation.

Today the Oregon Attorney General is resurrecting the dead by bringing a copycat case of @SECGov's enforcement action against Coinbase. As a reminder, the SEC dismissed that case with prejudice. This type of political jockeying is an embarrassing waste of Oregon taxpayer…

Paul Grewal criticized the lawsuit as a blatant example of political maneuvering, and a misuse of Oregon taxpayer dollars. He argued that such actions distract from the critical progress being made toward bipartisan legislation for digital assets. According to Grewal, this lawsuit will ultimately undermine efforts to protect consumers and strengthen America's position as a global leader in the digital economy, creating more obstacles at a pivotal moment for the industry.

Oregon Takes Aim At Trump Administration’s Regulatory Gaps

The State Attorney was blunt about his aim to intervene in potential regulatory gaps from the Trump administration. Since taking office in January, Trump’s newly formed SEC—now under Acting Chair Mark Uyeda—has largely left crypto firms alone, in stark contrast to the current administration’s approach under Gary Gensler.

Attorney General Rayfield maintains that states must step in to “fill the enforcement vacuum,” asserting that federal regulators have largely failed to pursue cases of cryptocurrency-related violations. This lawsuit, according to Oregon’s DOJ, is a direct response to that lack of action at the federal level.