Coinbase Hits Back at Oregon Over Sudden Crypto Policy Shift

Coinbase, the biggest cryptocurrency exchange in the U.S., is taking Oregon state officials to court, claiming they quietly changed their stance on digital assets. 

Coinbase Demands Transparency After State’s Abrupt Legal Action

The Washington Times reports that Coinbase has filed a lawsuit accusing Governor Tina Kotek and Attorney General Dan Rayfield of suddenly changing their stance on digital assets. It is now demanding public records to understand what led to the change, and claims that the shift happened behind closed doors, with no public hearings, rulemaking, or chance for input, violating transparency rules.

“Let there be no doubt: Oregon’s lawsuit, like the SEC’s, is meritless, and Coinbase will do whatever is required to beat it,” said Paul Grewal, Coinbase’s CLO, in a previous blog post. 

He shared that Oregon’s Attorney General is preparing to sue Coinbase using the same outdated arguments the SEC already dropped. Grewal called the move political and harmful, saying it goes against the bipartisan efforts in Washington to create clear, fair crypto rules.

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Ryan VanGrack, Coinbase’s vice president of litigation, stressed that transparency is essential for good governance. He criticized Oregon Attorney General Dan Rayfield for pursuing a lawsuit that, according to him, benefits out-of-state law firms while hurting Oregon residents who want to trade digital assets.

This comes after the Attorney General sued Coinbase in April. He claimed that the company broke the law by not registering with state and federal regulators. After the federal government dropped its case against Coinbase, Oregon filed its own lawsuit, claiming that Coinbase was illegally selling risky, unregistered crypto to people in the state.

Coinbase Says Oregon Lawsuit Favors Out-of-State Law Firms

Coinbase notes in its lawsuit that for years, Oregon told people that cryptocurrencies like Bitcoin were not covered by state rules. But suddenly, in April, the state changed its mind and filed a lawsuit against Coinbase, claiming that the company was breaking the law by not registering properly. It also points out that the state hired outside law firms that could take 20-30% of the gains if the case succeeds.

Coinbase argues that no new law was passed to regulate digital currencies and says the public deserves to know why it happened. The company wants the court to force Governor Kotek to release documents explaining the change.

An Untimely Move

Mr Vangrack notes that Oregon is the only state suing Coinbase, and it is both untimely and inappropriate for a state to step in on something that falls under federal authority. 

This comes as the lawmakers from both parties are working on legislation to bring clearer regulations to better regulate the crypto industry. Congress is expected to vote next week on two key bills: the Clarity Act and the GENIUS Act, which aim to bring more transparency and rules to the digital asset industry.