In a lawsuit against Coinbase, Oregon’s attorney general accuses the trading platform of violating state securities law.
Oregon’s attorney general is taking on the cryptocurrency exchange Coinbase for alleged violations of state securities laws by avoiding proper disclosures, according to a new lawsuit.
AG Dan Rayfield writes in the 171-page complaint, filed April 18 in Multnomah Circuit Court, that regulation is needed at the state level due to President Donald Trump’s efforts to de-regulate virtual currencies. The suit states a lack of oversight has allowed Coinbase to pocket millions in fees as Oregonians face losses from risky investments in a market “stacked against them and hard to navigate.”
“After building trust with Oregon consumers, Coinbase sold high risk investments without them being properly vetted to protect consumers,” Rayfield writes in a statement about the lawsuit. “Oregonians lost money, and we believe Coinbase should be held accountable and take steps to protect consumers.”
According to the AG’s office, unregistered securities are susceptible to pump-and-dump schemes and fraud, which can lead to devastating losses for investors.
Rayfield writes that under Trump, federal regulators have abandoned important cases, leaving Oregon investors exposed to fraud due to an “enforcement vacuum”
The Securities and Exchange Commission under Joe Biden targeted the crypto industry for market abuses, suing Coinbase on the grounds it put consumers at risk of financial harm and accusing Binance of mishandling funds. Coinbase is the largest crypto exchange in the U.S. and Binance is the world’s largest crypto exchange.
Earlier this month, Coinbase announced the SEC under Donald Trump had dropped its case against the exchange. Rayfield writes in the release the SEC lawyer who led the former case was reassigned the agency’s IT department.
Trump, who’s called himself the “crypto president,” has sought to create a far friendlier regulatory environment for the nascent asset class. Shortly after taking office, he signed an executive order to create a work group to draft crypto-friendly regulations and another to create a Strategic Bitcoin Reserve and a Digital Asset Stockpile. Earlier this week, his personal coins, which skyrocketed in value following his inauguration in January, were trading at a combined $2.5 billion.
In a blog post, Paul Grewal, chief legal officer for Coinbase, called Rayfield’s case stale and “a desperate scheme.”
“These hand-me-down arguments are years out of date and defy public opinion, technological progress, and good governance,” Grewal writes. “Let there be no doubt: Oregon’s lawsuit, like the SEC’s, is meritless, and Coinbase will do whatever is required to beat it.”
“Coinbase customers in Oregon and elsewhere can rest easy — we remain business as usual in the state and we are prepared to see this case, like others, through as far as necessary. We do not and will never shrink from fighting injustice, and we will never stop standing up for our customers and the industry.”
The lawsuit seeks a jury trial and $20,000 for each alleged violation of Oregon securities law.
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