Oregon's Attorney General deems XRP, SOL, and ADA as securities in conjunction with a lawsuit initiated against Coinbase.
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Oregon's Attorney General Dan Rayfield has taken a swing at Coinbase, filing a lawsuit claiming the exchange is in hot water for dealing with securities law violations by listing tokens like XRP, Solana (SOL), Cardano (ADA), and others without registering them.
Announced on April 18, this lawsuit forms part of Oregon’s proactive approach to address an area federal agencies, under the Trump administration, seemed to steer clear of. The Oregon Department of Justice has stated that "States have to step up in the absence of federal regulators abandoning these cases under the Trump administration."
The lawsuit pinpoints various cryptocurrencies, including XRP, Solana, Cardano, Aave (AAVE), Avalanche (AVAX), Uniswap (UNI), and Near Protocol (NEAR), which were made available for trading on Coinbase’s platform and Coinbase Prime, according to Oregon's complaint.
Coinbase is accused of treating these digital assets as securities without registering them properly. The exchange has yet to formally respond to the specific allegations, but its chief legal officer, Paul Grewal, took to Twitter to voice disapproval of the lawsuit, saying it would foster confusion and uncertainty.
Justin Slaughter, VP of regulatory affairs at Paradigm, a crypto investment firm, dismissed the lawsuit as a "wild-card lawsuit" because of the extensive range of assets it targets. Slaughter also pointed out that the complaint fails to explain why some assets, such as wrapped Terra's token (wLUNA), were included while others, like LUNA, were left out.
Legal experts have grappled with how this case could play out. Yarden Noy, a partner at DLT Law, suggested that if the court rules these assets as securities, it might create more chaos than clarity. According to Noy, such a verdict wouldn't set a binding precedent in other cases, neither within Oregon, and might overlook prior legal decisions, like the Ripple case, which didn't lead to an instant shift for other tokens.
Meanwhile, Ripple Labs, the company behind XRP, has been battling the U.S. Securities and Exchange Commission (SEC) in a long-running legal saga. The SEC charged Ripple in late 2020 for selling unregistered securities, claiming XRP was involved in a $1.3 billion offering of securities.
The SEC concluded the case in March 2025, but the future of XRP remains uncertain due to the ongoing legal dispute between Ripple and the SEC, as well as the new lawsuit by Oregon. The charges lobbed by state officials could make things even murkier as federal agencies take a step back from cryptocurrency regulation.
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This Oregon Attorney General's lawsuit against Coinbase represents a significant development in state-level cryptocurrency regulation and raises important questions about digital assets' classification and security regulation. Here's a brief overview of key implications and impacts:
Core Allegations:
- Unregistered securities: Dan Rayfield alleges Coinbase operated an exchange facilitating sales of unregistered securities, particularly assets vulnerable to "pump-and-dump" schemes, such as Internet Computer (ICP), which tumbled ~99% post-listing [1][5][4].
- Consumer harm: The complaint underlines investor losses, citing Coinbase’s alleged failure to thoroughly vet assets or disclose risks, while raking in fees from transactions [1][4].
Immediate Impacts:
- Legal precedent: If successful, the case could embolden other states to pursue similar actions, leading to fragmented regulatory oversight and complicating compliance for exchanges [3][4].
- Market uncertainty: Increased legal risks could deter exchanges from listing newer or experimental tokens, potentially stifling innovation [2][5].
- Investor sentiment: Publicity around losses (such as ICP's plunge) might deter retail participation in cryptocurrency markets, particularly in states with aggressive enforcement [1][5].
Long-Term Implications:
- Regulatory conflict: The lawsuit underscores tensions between state and federal regulators, possibly paving the way for inconsistent standards for what constitutes a security [3][4].
- Industry response: Coinbase’s forceful rebuttal, labeling the lawsuit a "copycat" and "meritless," suggests drawn-out legal battles with exchanges likely lobbying for federal preemption of state laws [2][5].
- Compliance costs: Exchanges may face higher operational expenses to meet varying state requirements, putting smaller platforms at a disadvantage [3][4].
Key Legal Questions:
- Security classification: The case's success hinges on whether specific tokens meet the Howey Test criteria, a challenge due to the lack of clear federal guidance [4][5].
- Jurisdictional authority: Courts must weigh states’ consumer protection mandates against federal claims of primary responsibility in securities regulation [3][4].
The outcome of this case could redefine cryptocurrency market operations in the U.S., highlighting the necessity for legislative clarity to avoid fragmented enforcement.
- Dan Rayfield, Oregon's Attorney General, has accused Coinbase of listing and trading tokens like Cardano (ADA), Solana (SOL), Ripple (XRP), Aave (AAVE), Avalanche (AVAX), Uniswap (UNI), Near Protocol (NEAR), and Internet Computer (ICP) without properly registering them as securities.
- Associates at Paradigm, a crypto investment firm, depicted the lawsuit as a "wild-card lawsuit" due to its extensive target range and failure to clarify why specific assets like wLUNA were included while others like LUNA were excluded.
- If the court rules these assets as securities, it might create more chaos than clarity, according to legal expert Yarden Noy from DLT Law, who also suggested that such a verdict wouldn't set a binding precedent in other cases.
- The SEC concluded its long-running battle with Ripple Labs in March 2025, but the future of XRP remains uncertain, owing to the company's ongoing legal dispute with the SEC and the recent lawsuit by Oregon.
- In the business world, states like Oregon are stepping up to fill the gap left by federal agencies under the Trump administration in addressing cryptocurrency violations, leading to fragmented regulatory oversight and potential complications for exchanges.
- Technology firms like Coinbase may face increased costs to comply with varying state requirements, potentially putting smaller platforms at a disadvantage in the ever-evolving paradigm of finance and business.
