Coinbase Moves to Bring Oregon Securities Suit to Federal Jurisdiction

Coinbase (COIN) is petitioning a federal court to take over jurisdiction of Oregon's lawsuit accusing it of selling unregistered securities, arguing the state is improperly interfering with federal efforts to clarify digital asset regulations.

In a filing late Monday evening, Coinbase argued that Oregon Attorney General Dan Rayfield’s lawsuit which it initiated in April over alleged trading of unregistered securities represents an overreach, and seeks to establish a patchwork regulatory landscape conflicting directly with ongoing bipartisan efforts at the federal level.

"This lawsuit is a regulatory land grab," the filing reads. "Dissatisfied with the federal government’s recent enforcement decisions, Oregon’s new Attorney General has set out to dictate the future of crypto and the nationwide platforms on which they trade."

Coinbase further argues that Oregon's lawsuit ignores recent bipartisan federal efforts to clarify crypto regulations, improperly tries to create independent state-level oversight of digital asset platforms, and wrongly resurrects claims previously dismissed by federal regulators.

The Securities and Exchange Commission (SEC) dropped its enforcement action against Coinbase in February, weeks after the inauguration of President Donald Trump. The exchange made a $1 million donation to Trump's inaugural committee.

"What you have here is Oregon, and only Oregon, trying to revive the SEC case, which was dismissed with prejudice," said Ryan VanGrack, Coinbase Vice President of Legal in an interview.

"A lone Attorney General is trying to inhibit regulatory clarity and impede consumers' freedom to choose when and how they invest in crypto," VanGrack said.

Coinbase points out in the filing that the state's Attorney General might not even have the authority to file the case.

"Oregon-based securities transactions are generally regulated by the Division of Financial Regulation, not the Attorney General," Coinbase wrote. "The Attorney General nonetheless seeks to stretch his limited enforcement authority beyond the breaking point to install himself as the commissar of crypto for Oregon and beyond."

In an interview, VanGrack explicitly rejected the idea that Oregon’s lawsuit is simply a partisan issue.

Rather than framing it as a straightforward "red state vs. blue state" conflict, he emphasized a more nuanced approach, highlighting how states of various political leanings have dropped or not pursued similar actions.

"Crypto has become more bipartisan, and we have other statewide litigation in which red states and blue states have dismissed their actions," he said, highlighting Vermont, a traditionally Democratic state, as well as Kentucky, considered politically "red" federally but led by a Democratic governor, and Illinois, typically seen as a blue state, all dismissing crypto-related litigation.

"It's less about red or blue; it's that there are a few holdovers," VanGrack said, emphasizing that crypto regulation and clarity have increasingly become bipartisan goals federally.

He suggested Oregon’s action is an outlier driven not necessarily by partisan politics, but by the specific motivations of its Attorney General.

"The motivations for this lawsuit are transparent," VanGrack concluded. "It's not about the law, and it's not about a desire to help Oregonians. It's about the politics. It's an effort to grab headlines at Oregon's expense."

Coinbase has pledged to vigorously defend its position, stating clearly it has no intention of voluntarily exiting Oregon’s market.

"We are not pulling out of the state unless we are required to," VanGrack affirmed. "We are going to fight, because what Oregon has done is wrong."