Coinbase is pushing to move Oregon’s crypto-related securities case to federal court, arguing the state is mimicking the SEC’s claims without new grounds.
As an attempt to “invade the province of federal law,” Coinbase has maintained that a securities action filed by the attorney general of Oregon ought to be considered in federal court.
Coinbase has requested that a US federal judge consider a lawsuit filed by the attorney general of Oregon, arguing that it is a replica of an earlier case brought by the Securities and Exchange Commission that should be heard in federal court.
Coinbase argued in a June 2 motion submitted to a federal court in Portland that the April lawsuit from Oregon Attorney General Dan Rayfield, which accused the company of selling unregistered securities to citizens of the state, was an “attempt to invade the province of federal law” and that it went beyond his jurisdiction.
The cryptocurrency exchange asserts that Rayfield’s lawsuit mirrors the SEC’s 2023 action against the company, alleging it issued unregistered securities. In February, the SEC withdrew the complaint, one of numerous cryptocurrency matters dropped during the Trump administration.
Coinbase stated, “Oregon’s new attorney general has set out to dictate the future of digital assets and the nationwide platforms on which they trade — on his chosen terms, timing, and turf — after being dissatisfied with the federal government’s recent enforcement decisions.”
In his lawsuit, Rayfield claimed that Coinbase “sold high-risk investments without them being properly vetted to protect consumers” and that the purportedly unregistered securities it sold were “vulnerable to pump-and-dump schemes and fraud.” Rayfield made these claims at the time of the lawsuit.
According to the motion, Rayfield informed Coinbase that he intended to sue the exchange within 48 hours, and the company attempted to meet with him, but Rayfield declined.
“Oregon’s claims raise fundamental federal issues like the meaning of an “investment contract,”” according to Coinbase’s chief legal officer, Paul Grewal, who stated in a June 3 X post that a federal court should decide the matter.
“States need to fill the enforcement gap.”
After Donald Trump took office, Rayfield claimed that the SEC had moved its top crypto litigator to the agency’s IT desk, and he filed his complaint against Coinbase after the agency withdrew its prosecution against the exchange.
“The enforcement void left by federal regulators who are giving up under the new administration and abandoning these important cases must be filled by the states,” he said.
Following South Carolina and Vermont, Kentucky is the latest state to dismiss its lawsuit against Coinbase, joining several other US states that have done so recently.
