Oregon’s attorney general is suing Coinbase, a major cryptocurrency exchange, for allegedly selling unregistered cryptocurrencies to Oregon residents. This led to significant financial losses for investors, according to the lawsuit.
The Attorney General’s Claims
The lawsuit, filed in Multnomah County Circuit Court, claims Coinbase violated Oregon securities law. The attorney general argues that Coinbase didn’t properly vet high-risk investments before offering them to Oregonians, breaching the trust placed in the platform. He emphasized the need for transparency in cryptocurrency investments, comparing it to the need for informed consent before medical procedures.
The lawsuit specifically points to the risk of unregistered securities being vulnerable to scams like “pump-and-dump” schemes. A prime example cited is Internet Computer Protocol (ICP), which plummeted from $700 to around $7 after its launch on Coinbase. This dramatic price drop highlights the potential for significant investor losses. The timing of the lawsuit is notable, coming after the SEC dropped its case against Coinbase. The Oregon attorney general stressed the importance of state-level enforcement when federal action is lacking.
Coinbase’s Rebuttal
Coinbase’s Chief Legal Officer, Paul Grewal, fired back on X (formerly Twitter), calling the lawsuit a “copycat” of the dismissed SEC case. He labeled it a politically motivated waste of taxpayer money, arguing that bipartisan legislation is a more effective approach to regulating digital assets. Grewal also criticized the lawsuit for allegedly ignoring key court rulings and being influenced by law firms hoping to profit. Despite the lawsuit, Coinbase says it will continue operating normally in Oregon.