Oregon sues Coinbase for selling 31 unregistered crypto tokens, including XRP and ADA.

Attorney General claims Coinbase misled users and sold risky investments to them..

The legal battleground expands as Oregon Attorney General (AG) Dannotified Rayfield has sued Coinbase for allegedly selling unregistered crypto tokens within the state. The lawsuit, filed on behalf of over 500,000 users without their consent, also claims the exchange misled users with risky investments, leading to financial losses.

Oregon's AG is pursuing a broader case than the U.S. Securities and Exchange Commission (SEC), which had sued Coinbase for selling unregistered securities and named 18 tokens in its lawsuit.

In contrast, Oregon's lawsuit names at least 31 tokens that it claims were offered and sold as unregistered securities. Among them are prominent tokens such as XRP, ADA, LINK, AAVE, MKR, and UNI.

"Coinbase built trust with people in Oregon, which it used to offer risky investments that weren't fully checked. Because of this, people lost money, and we think Coinbase should be held responsible," said AG Rayfield.

"Coinbase made millions in fees by helping sell unregistered cryptocurrencies, while Oregonians lost money. This lawsuit is about holding companies accountable for breaking the law."

The lawsuit broadly claims that Coinbase flouted state securities laws by offering and selling unregistered, unacknowledged investment contracts—cryptocurrency tokens—within the state. It alleges that Coinbase's actions were willful, wanton, and in reckless disregard of the consequences.

"We're suing Coinbase for selling risky investments to Oregonians without registering them or disclosing the risks, as the law requires," said AG Rayfield. "Coinbase profited massively from selling these investments, while Oregonians are left holding the bag."

Out of the 31 tokens named in Oregon's lawsuit, 18 were also included in the SEC's complaint. However, Oregon's lawsuit includes additional tokens such as SOL, MATIC, UNI, and several others.

Coinbase Chief Legal Officer Paul Grewal responded on X, formerly Twitter, criticizing the AG's actions and stating that the lawsuit could threaten the entire crypto industry.

"Today, the Oregon AG sued to shut down Coinbase's operations in the state. He's trying to shut down an entire industry and limit peoples' financial choices. We'll fight this case and plan to continue serving Oregonians."

He added, "The AG sued on behalf of 500k+ Coinbase users—without their consent. He's also trying to intervene in a federal case that's already decided. This case is about the AG overstepping his bounds."

The lawsuit could have broader implications as it attempts to redefine specific tokens, such as XRP, within the legal framework of securities.

While the SEC case focused on classifying tokens broadly, Oregon's lawsuit specifically names and claims each token should be recognized as a security.

This claim is significant as it implicates tokens like XRP, which has been a subject of contention in the ongoing legal battle with Ripple.

Although a federal judge ruled in favor of Ripple and ruled that XRP is not a security in that case, state AGs' actions could reopen the debate and vary the legal interpretation of these tokens.