Coinbase is once again in legal crosshairs — Oregon Attorney General Dan Rayfield has launched a complaint against the crypto exchange, alleging it sold unregistered securities to residents of the U.S. state without properly screening the risky investments to protect consumers.
The state-level lawsuit follows the SEC’s decision to dismiss a federal enforcement lawsuit against Coinbase in February, part of a broader reversal on cryptocurrencies in which several digital asset enforcement cases were halted.
According to the attorney general’s office statement, states are left to cover the enforcement gap created by federal authorities who are “giving up” and “abandoning these important cases.”
Yesterday, the initial news about the lawsuit surfaced as Coinbase Chief Legal Officer Paul Grewal informed the crypto community in a tweet that the Oregon Attorney General was “resurrecting the dead by bringing a copycat case of SEC’s enforcement action against Coinbase.”
XRP decision omitted
In a recent tweet, Coinbase CLO Paul Grewal stated that the crypto exchange had finally laid its hands on the Oregon AG complaint.
Interestingly, there was no mention of Judge Torres’ decision in the Ripple lawsuit. In July 2023, Judge Torres ruled that XRP is “not necessarily a security on its face,” undermining the SEC’s argument. The win wasn’t just a turning point for Ripple but for the entire crypto industry.
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Grewal hinted at the motivation of the lawsuit, which aims to revive the regulation by enforcement approach, saying in an initial tweet that the AG’s office made it clear that it was picking up where the former SEC chair, Gary Gensler, left off.
“If there were any doubt about the motivation behind it, look no further than section 9,” Grewal stated alongside a screenshot of the portion of the lawsuit that omitted Judge Failla’s order granting the SEC’s interlocutory appeal; any mention of Judge Torres’ decision on XRP and “labels the Chairman of the SEC as a crypto lobbyist while also decrying the reassignment of Gensler’s lead lawyer to the IT department.”
Grewal stated that Coinbase remains confident that it is right on the facts and the law and prepared to fight the “misguided” lawsuit.