Oregon AG Challenges Coinbase’s Attempt to Move Case to Federal Court
Oregon Insists on Retaining Jurisdiction in Coinbase Case
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In a significant legal maneuver, Oregon’s Attorney General, Dan Rayfield, has filed a motion to ensure the lawsuit against the cryptocurrency exchange Coinbase remains in the state’s judicial system. This action comes in response to Coinbase’s efforts to transfer the litigation to a federal court, citing the involvement of federal securities laws.
Background on the Legal Dispute
Earlier this year, Coinbase initiated a move to shift the case from Oregon’s jurisdiction to a federal court, arguing the lawsuit involved federal legal questions. The exchange contended that Oregon’s claims were fundamentally tied to federal law interpretations, particularly utilizing the federal Securities Act of 1993 and the Howey Test as benchmarks for defining investment contracts.
Oregon’s Unique Legal Interpretation
However, the Oregon Attorney General’s motion provides a robust counterargument. It emphasizes that almost five decades ago, the Oregon Supreme Court diverged from the Howey Test’s interpretation, opting instead for a more expansive definition through the Pratt Test, established in the landmark case Pratt v. Kross. This modified definition is crucial because it allows Oregon to address a broader spectrum of investment schemes under its state laws.
State Court as the Appropriate Venue
The Attorney General asserts that the lawsuit is fundamentally a state law action, intended to seek justice for Oregonians under the state’s securities regulations. The motion firmly opposes the notion of a “regulatory land grab,” as described by Coinbase, instead advocating for the state court to adjudicate the matter.
Oregon’s Legal Action Against Coinbase: A Broader Context
In April, the Oregon AG filed a comprehensive complaint against Coinbase in the Multnomah County Circuit Court. The lawsuit accuses the exchange of violating state securities laws by facilitating the sale of unregistered cryptocurrencies to Oregon residents, an action that allegedly resulted in significant financial losses.
Comparison with Federal Regulatory Actions
The complaint aligns with the broader regulatory scrutiny Coinbase has faced, including a notable lawsuit from the Securities and Exchange Commission (SEC) in 2023. The SEC accused Coinbase of operating as an unregistered broker-dealer and unlawfully selling unregistered securities, leading to a legal battle that was eventually dismissed in 2025 following regulatory developments.
Expansion Beyond Federal Cases
Oregon’s lawsuit stands out as it covers more tokens than the SEC’s original case, with allegations involving 31 cryptocurrencies being marketed as investment contracts. This highlights the state’s proactive stance in safeguarding consumers from high-risk investments that were allegedly inadequately vetted by the exchange.
Industry Reactions and Future Implications
In response to the ongoing legal proceedings, Coinbase’s Chief Legal Officer, Paul Grewal, criticized the AG’s efforts to maintain state jurisdiction. He described the lawsuit as a “Gensler-era copycat” of previous federal regulatory approaches, arguing that it undermines recent progress towards a unified federal framework for the cryptocurrency industry.
As the legal battle unfolds, the outcome could have far-reaching implications for state versus federal regulatory authority over cryptocurrency exchanges and the broader landscape of digital asset regulation in the United States.
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