Coinbase wants Oregon’s ‘copycat’ securities case in federal court

Coinbase has asked a US federal judge to hear a lawsuit from Oregon’s attorney general, claiming that it is a copy of a prior Securities and Exchange Commission lawsuit that belongs in federal court.

In a June 2motionfiled in a Portland federal court, Coinbase claimed Oregon Attorney General Dan Rayfield’sApril lawsuit accusing the firmof selling unregistered securities to the state’s residents exceeded his authority and is an “attempt to invade the province of federal law.”

The crypto exchange said Rayfield’s suit is a “copycat case” of the SEC’s 2023 lawsuit against the firm that alleged it sold unregistered securities. The SECagreed to dropthe case in February, one of many crypto cases it abandoned under the Trump administration.

“Dissatisfied with the federal government’s recent enforcement decisions, Oregon’s new Attorney General has set out to dictate the future of digital assets and the nationwide platforms on which they trade — on his chosen terms, timing, and turf,” Coinbase wrote.

Rayfieldsaidat the time of his lawsuit that he sued Coinbase because the exchange “sold high-risk investments without them being properly vetted to protect consumers” and that the alleged unregistered securities it sold are “vulnerable to pump-and-dump schemes and fraud.”

In the motion, Coinbase said that it tried to meet with Rayfield after he notified the firm that he planned on suing the exchange within 48 hours, but Rayfield refused.

Related:Crypto vulnerable if CFTC not given authority, says ex-chair Behnam

Coinbase’s chief legal officer, Paul Grewal, said in a June 3 Xpostthat “Oregon’s claims raise fundamentally federal issues like the meaning of ‘investment contract,’” which he added should be resolved by a federal court.

“States must fill enforcement vacuum”

Rayfield said that his complaint against Coinbase came after the SEC dropped its case against the exchange and the agency had reassigned its top crypto litigator to the agency’s IT desk after Donald Trump entered the White House.

He said the states “must fill the enforcement vacuum being left by federal regulators who are giving up under the new administration and abandoning these important cases.”

In recent months, several US states have dropped their lawsuits against Coinbase, with Kentuckybeing the third state, following Vermont and South Carolina, to have abandoned legal action against the exchange.

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