- Coinbase seeks to move an Oregon lawsuit to federal court, claiming it repeats charges from a previous federal case.
- Oregon Attorney General Dan Rayfield sued Coinbase for allegedly selling unregistered securities to state residents.
- The lawsuit mirrors a 2023 Securities and Exchange Commission (SEC) case that the SEC dropped earlier this year.
- Rayfield argues that states need to enforce securities laws as federal regulators step back from crypto cases.
- Similar lawsuits in Kentucky, Vermont, and South Carolina were recently abandoned.
Coinbase has asked a U.S. federal judge in Portland to take up a lawsuit filed by Oregon Attorney General Dan Rayfield. The company claims the suit is a duplicate of allegations made in an earlier federal case that was already closed.
In a June 2 court filing, Coinbase argued that Rayfield’s April lawsuit over selling unregistered securities went beyond his legal authority and should be decided at the federal level. The company described the move as an “attempt to invade the province of federal law.”
According to Coinbase, the lawsuit copies the 2023 SEC action where the regulator accused it of selling unregistered securities. The SEC dropped that case in February. In its latest motion, Coinbase stated that, after Rayfield notified the company of his intention to sue within 48 hours, they attempted to meet, but Rayfield declined.
Rayfield explained he sued Coinbase because the firm allegedly “sold high-risk investments without them being properly vetted to protect consumers.” He said these unregistered securities were especially at risk of pump-and-dump schemes and fraud. Rayfield also claimed his action filled an “enforcement vacuum” as federal regulators, under a new administration, were backing away from crypto oversight after reassigning their key crypto staff.
Paul Grewal, Coinbase‘s chief legal officer, said in a June 3 social media post that these issues, such as whether something is an “investment contract,” are fundamentally federal questions.
Recent developments show other states reconsidering similar action. Kentucky, Vermont, and South Carolina have all dropped their lawsuits against Coinbase in recent months, reducing the number of state-level cases targeting the company.
For further statements from Oregon’s Attorney General, see the official press release. The court filing is also available on CourtListener.
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