Oregon AG Dan Rayfield has filed a lawsuit against Coinbase, alleging violations of state securities laws due to inadequate consumer protections. The lawsuit argues that deregulation has led to increased risks for investors. Coinbase has responded, claiming the suit is out-of-date and meritless, pledging to fight the claims.
In a significant move, Oregon’s attorney general, Dan Rayfield, has launched a lawsuit against the cryptocurrency exchange Coinbase, alleging that the platform flouted state securities laws. The 171-page complaint, filed on April 18 in Multnomah Circuit Court, contends that a lack of regulatory oversight has enabled Coinbase to amass millions in fees while Oregonians suffer financial losses in a turbulent investment landscape.
Rayfield’s complaint highlights the consequences of deregulation efforts under former President Donald Trump, arguing that investors in Oregon face increased risk without proper consumer protections. “Coinbase, after securing trust among local consumers, marketed high-risk investments that were inadequately reviewed,” Rayfield stated in remarks concerning the suit. He emphasized accountability, asserting that Coinbase must implement measures to safeguard consumers’ interests.
The attorney general’s office emphasizes that the unregistered nature of these securities leaves investors vulnerable to schemes, including pump-and-dump tactics, potentially resulting in severe financial harm. Rayfield charged that the federal landscape has been largely abandoned by regulators, leading to what he describes as an “enforcement vacuum.”
Meanwhile, the Securities and Exchange Commission (SEC), under President Joe Biden, has increased scrutiny on the crypto sector, with actions not only against Coinbase but also targeting Binance, accusing it of mishandling funds. Coinbase stands out as the largest crypto exchange in the United States, while Binance holds a leading position globally.
Coinbase itself recently revealed that an SEC case initiated during the Trump administration had been discontinued. Rayfield pointed out that the former SEC attorney overseeing that investigation had been reassigned to a non-enforcement role within the agency. The ex-president has branded himself the “crypto president,” making moves to enhance the regulatory landscape for digital currencies, which includes initiating a new work group focused on crypto-friendly regulations.
In response to the lawsuit, Coinbase’s Chief Legal Officer, Paul Grewal, dismissed the allegations, characterizing them as outdated and desperate arguments. He stated that the lawsuit is without merit and expressed confidence in the company’s ability to defend itself. Grewal reassured Coinbase customers that the company remains committed to its operations in Oregon, asserting their readiness to contest the lawsuit to its full extent.
The lawsuit seeks a jury trial and requests damages of $20,000 for each alleged breach of Oregon’s securities laws.
