Oregon is suing Coinbase, with Attorney General Dan Rayfield claiming he is helping fill a gap the Securities and Exchange Commission left when it dropped its case against the country’s largest crypto trading platform.
“After building trust with Oregon consumers, Coinbase sold high-risk investments without them being properly vetted to protect consumers,” Rayfield said. “Oregonians lost money, and we believe Coinbase should be held accountable and take steps to protect consumers.”
The suit was filed in Multnomah County Circuit Court last Friday. It alleges that Coinbase is “engaged in ongoing and widespread violations” of Oregon securities laws by pocketing millions in fees while creating and operating an exchange to sell unregistered securities, which Ryland argues were inherently risky investments.
“Coinbase has for years operated an illegal securities business in Oregon through its cryptocurrency trading platform and its practice of selling high-risk and unregistered securities to Oregonians,” the complaint read.
In one example included in the complaint, Oregon cited the “ICP,” the “native token” of the “Internet Computer Protocol,” a blockchain-based protocol conceived by a Swiss non-profit in 2016. According to the complaint, ICP’s price fell from $700 to $72 within one month of launching on Coinbase, allegedly draining “billions” of investors’ money.
The SEC dropped its enforcement case against Coinbase in late February, with Acting Chair Mark Uyeda arguing that during SEC Chair Gary Gensler’s tenure, the commission’s “views on crypto have been largely expressed through enforcement actions without engaging the general public” (Uyeda served as acting chair until Paul Atkins was sworn in this week.)
The SEC originally sued Coinbase in 2023, accusing it of running an illegal exchange by letting users trade unregistered crypto tokens. In an interview with Bloomberg Television, Gensler said the SEC had worked with 10 states to bring the complaint. He questioned why traditional stock exchanges should be “undermined” by Coinbase, which he said flouted industry regulations.
According to Rayfield, Oregon launched its suit against Coinbase due to the SEC’s decision to drop its suit and the demotion of the SEC attorney who’d previously led the Coinbase case.
According to reporting from the Wall Street Journal and a WealthManagement.com interview with Gensler’s former senior crypto policy advisor, Jorge Tenreiro, the former acting head of the commission’s Crypto Asset and Cyber Unit under Gensler was demoted and moved to a role in the commission’s Information Technology office in January.
The commission also replaced the Crypto Asset and Cyber Unit with the Cyber and Emerging Technologies Unit, which grouped crypto enforcement as one among several other priorities.
In a statement on Coinbase’s site about the Oregon complaint, Chief Legal Officer Paul Grewal wrote that the SEC’s decision to drop its case made it clear that “the war against crypto waged by the previous SEC and its allies is over—crypto won.”
“Oregon’s holdout campaign is obstruction for the sake of obstruction,” Grewal wrote. “It is a desperate scheme that does nothing to move the crypto conversation forward, and in fact takes us a giant leap backwards from hard-won progress.”
According to Rayfield, states like Oregon must fill the “enforcement vacuum” left by the SEC and other federal regulators under President Donald Trump’s administration.
“I am committed to protecting Oregon’s investors so they are not taken advantage of,” he said.
Grewal argued that the company would do “whatever is required” to defeat Oregon’s lawsuit, but warned that “no lawsuit is harmless.”
“In fact, Oregon’s lawsuit directly undermines constructive policymaking happening in DC,” Grewal wrote. “Yet instead of waiting for Democrats and Republicans in Congress to enact clear rules of the road, Oregon has taken it upon itself to try to regulate a worldwide industry through enforcement.”