Oregon Sues Coinbase As Millions Face Losses After Federal Government Sidelines SEC Investigator

Oregon Attorney General Rayfield announced yesterday that his office is suing Coinbase for promoting and selling high-risk investments. The announcement came after the Trump Administration dropped its case against the crypto giant and reassigned the lawyer working on it.

Oregon Takes Over Fight Against Coinbase

Coinbase, reportedly the leading U.S.-based crypto exchange with an estimated over 100 million users, was under investigation by the Securities and Exchange Commission (SEC) until it recently dropped its case and reassigned the lawyer leading the case to the SEC’s IT office.

Rayfield said in a statement that the states must fill the enforcement vacuum left by federal regulators who are giving up under the new administration and abandoning important cases and have filed a lawsuit against Coinbase.

Key moments leading up to Oregon’s Coinbase lawsuit:

The Oregon lawsuit filed in the Multnomah County Circuit Court yesterday alleges that Coinbase created and operated an exchange that drives and supports the sale of unregistered securities, in the form of unregistered cryptocurrencies, in other words, risky investments, to people in Oregon after building trust with consumers.

Coinbase has reaped millions of dollars in fees in this way as Oregonians have faced huge losses, often devastating, from risky investments in a market that’s stacked against them and hard to navigate. Rayfield said. “Oregonians lost money, and we believe Coinbase should be held accountable and take steps to protect consumers.”

Coinbase actively promotes and encourages Oregonians to buy digital assets—cryptocurrencies listed on its platform. It connects buyers and sellers, handles their trades, and manages their funds and assets.

Here is a rough breakdown of how Coinbase users actually behave:

These are vulnerable to pump-and-dump schemes and fraud, which often end in devastating losses for investors, while insiders behind the tokens profit from investors not being able to fully research their investments.

One example is the unregistered cryptocurrency Internet Computer Protocol (ICP), which dropped from $700 to $72 within a month of its launch. The coin now trades around $7 per share. This price drop of almost 99% wiped out billions of dollars of investors’ money.

Rayfield said, “I am committed to protecting Oregon’s investors so they’re not taken advantage of.”