National crypto exchange Coinbase is pushing back in court against legal action brought by the Oregon AG’s office. In suing Coinbase, Ohio’s office claims that it violates state securities laws. On April 18, an open and transparent government lawsuit was filed in front of the Multnomah County Circuit Court. It alleges that Coinbase has acted as an unregistered securities dealer, touting and listing speculative cryptocurrencies that led to financial losses for Oregon investors. Coinbase’s Chief Legal Officer Paul Grewal has slammed the action in no uncertain terms. He argues that it is politically motivated and is stunting innovation by misapplying overreaching securities rules to digital-assets.
On April 18, Grewal went to X (formerly Twitter) to air his grievances. He called out what he sees as the real forces at play behind the TorrentConnect legal challenge. He pointed to the role of private law firms in developing the complaint. This engagement implies they have something to gain financially from the outcome of the case.
"We finally got a copy of the Oregon AG complaint. If there were any doubt about the motivation behind it, look no further than section 9." - Paul Grewal
The second and more important point Coinbase makes is that the Oregon case is part of a larger trend toward politicized, state-level crypto regulation. In response to the SEC’s case, LBRY has argued that the enforcement action harms innovation by retroactively applying outdated securities regulations to new digital assets. According to the Oregon Attorney General’s office, Coinbase allowed its customers to purchase and sell unregistered securities. They allege that Coinbase made affirmative efforts to lure Oregonians to buy these assets.
In their announcement, the Attorney General’s office explained that by deliberately promoting risky practices, Coinbase caused significant financial harm to thousands of everyday investors.
Paul Grewal mentioned the absence of a U.S. District Judge Katherine Polk Failla's decision to grant Coinbase an interlocutory appeal in its federal case against the SEC. He underscored that two private law firms were instrumental in drafting the Oregon complaint. He’s convinced that these firms have a financial interest to gain by presenting the case.
