Coinbase Faces Fresh Legal Challenge—State of Oregon Steps in After SEC Pullback

• Oregon sues Coinbase for allegedly selling unregistered securities raising concerns over crypto regulation enforcement
• Attorney General Rayfield claims states must step in as federal agencies fail to prosecute violations effectively
• $ICP token price collapse cited as evidence of crypto risks dropping 99 percent and wiping out billions in investor money

Just when everyone thought the debate of “altcoin as securities” had extinguished after the SEC dropped several lawsuits against crypto firms this year, the State of Oregon has hit one of the most popular crypto exchanges in the U.S. with a fresh legal challenge. 

On this Friday, Oregon State Attorney Dan Rayfield filed a lawsuit against Coinbase, accusing the centralized exchange of violating the State’s securities laws. The complaint filed in the Multnomah County Circuit Court claims Coinbase promoted and sold high-risk investments categorized as unregistered securities.

State Attorney Rayfield accused Coinbase of “building trust with Oregon consumers” before selling unregistered investment assets. “Oregonians lost money, and we believe Coinbase should be held accountable,’ he said. 

The Oregon DOJ points to Internet Computer Protocol (ICP) as a prime example of the risks tied to unregistered securities. When it launched on Coinbase, ICP was trading at a sky-high $700, only to nosedive to $72 in a month. Fast forward to today, and it’s hovering around $7, a 99% drop that wiped out billions from investors. The DOJ argues that cases like this highlight how a lack of enforcement leaves everyday traders vulnerable to devastating losses in the crypto market.

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Coinbase CLO Reacts

Coinbase’s CLO Paul Grewal went on Twitter to talk about the new lawsuit. On the post, Grewal compared Oregon’s lawsuit to the infamous SEC filing, calling it a “copycat case” mirroring Gary Gensler’s aggressive approach to crypto regulation.

Paul Grewal criticized the lawsuit as a blatant example of political maneuvering, calling it a misuse of Oregon taxpayer dollars. He argued that such actions divert attention from the critical progress being made toward bipartisan legislation for digital assets. According to Grewal, this lawsuit undermines efforts to protect consumers and strengthen America’s position as a global leader in the digital economy, instead creating unnecessary obstacles at a pivotal moment for the industry.

Oregon Takes Aim at Trump Administration’s Regulatory Gaps

The State Attorney was not shy about his intent to cover potentially regulatory gaps from the Trump administration. Since taking office in January of this year, Trump’s newly formed SEC under then Acting Chair Mark Uyeda has been remarkably soft on crypto firms—a stark contrast from the Gary Gensler era. 

Attorney General Rayfield asserts that states must step in to "fill the enforcement vacuum," accusing federal regulators of failing to prosecute crypto-related violations effectively. According to Oregon’s DOJ, this lawsuit is a direct response to federal inaction.

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