Oregon Sets Its Sights on Coinbase Following SEC’s Dismissal of Federal Lawsuit

Oregon Attorney General Dan Rayfield is planning a lawsuit against crypto exchange Coinbase, alleging the company is selling unregistered securities to residents of the state, following the United States Securities and Exchange Commission’s (SEC) decision to drop its federal case against the exchange. According to Coinbase’s chief legal officer, Paul Grewal, the lawsuit resembles a “copycat case” of the SEC’s 2023 lawsuit against the exchange, which was withdrawn in February. Grewal stated: “In case you think I’m jumping to conclusions, the attorney general’s office made it clear to us that they are literally picking up where the Gary Gensler SEC left off — seriously. This is exactly the opposite of what Americans should be focused on right now.”

The lawsuit indicates that the crypto industry continues to confront regulatory challenges and resistance at the state level, despite achieving several legal successes federally. Pushback from state regulators could lead to fragmented crypto regulations across the US, complicating the establishment of a cohesive national policy.

Source: Paul Grewal

Related: Coinbase distances Base from a highly criticized memecoin that dumped $15M

Several states have withdrawn lawsuits against Coinbase following the SEC’s revised stance on cryptocurrencies after the resignation of former chairman Gary Gensler in January. Gensler’s exit initiated a wave of retracted lawsuits, enforcement actions, and investigations against crypto firms, including Coinbase, Uniswap, and Kraken. During the first quarter of this year, multiple states followed suit and also dropped their lawsuits against Coinbase. Vermont, one of the 10 states that had filed litigation against the exchange, dismissed its lawsuit on March 13. The state’s legal order referenced the SEC’s regulatory shift and the formation of a crypto task force as justification for its decision. South Carolina invalidated its lawsuit against Coinbase two weeks after Vermont rescinded its litigation. Kentucky’s Department of Financial Institutions became the third state regulator to drop its lawsuit against Coinbase, concluding the litigation on March 26.

Despite these legal victories, Grewal urged the federal government to abandon the piecemeal state-by-state approach to crypto regulation and instead pursue clear, coherent market structure policies at the federal level.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered