Oregon’s Coinbase Suit Tests Boundaries of State and Federal Crypto Regulation

According to an article by attorneys from Sheppard Mullin Richter & Hampton, Oregon filed a civil enforcement action on April 18, 2025, against Coinbase Global, Inc., alleging the sale of unregistered securities through its digital asset platform. Oregon Attorney General Dan Rayfield explicitly framed the suit as a response to the SEC’s recent dismissal of its own enforcement case against Coinbase, suggesting that states must now step in where federal regulators have pulled back. This development reflects a growing divide between state and federal approaches to crypto regulation and raises broader questions about regulatory authority and timing.

Oregon’s complaint relies on the state’s interpretation of “investment contracts” under its blue sky laws, applying a variant of the Howey test to argue that certain digital assets on Coinbase’s platform constitute securities. The state alleges Coinbase materially aided in unregistered securities sales, thereby violating Oregon law. The suit is particularly aggressive because it intrudes upon territory long occupied by the SEC, overseeing national securities markets. Compounding that friction is the fact that the SEC’s withdrawal from its Coinbase suit appears to have been a catalyst for Oregon’s action.

However, the article notes that recent developments do not support the idea that the SEC has abdicated its role in crypto regulation. Since President Trump’s return to office, the SEC has launched a Crypto Task Force aimed at building a fit-for-purpose regulatory framework. Through public roundtables and stakeholder engagement, the SEC is working to clarify the status of digital assets, custody practices, and decentralized finance (DeFi). Several states, including Alabama and Vermont, have cited these efforts in deciding to withdraw their own cases against Coinbase.

While states may seek to fill perceived enforcement gaps, federal regulators are actively retooling their approach through rulemaking rather than litigation. In this evolving landscape, coordination, not competition, among regulators is key to achieving durable legal clarity.