Oregon sues Coinbase for unregistered assets after $693M loss in ICP

Oregon Attorney General Dan Rayfield has filed a lawsuit against Coinbase, accusing the cryptocurrency exchange of selling unregistered securities to residents of the state just weeks after the U.S. Securities and Exchange Commission (SEC) dropped its federal case against the company.

The lawsuit, filed in Multnomah County Circuit Court, alleges that Coinbase facilitated and promoted the sale of high-risk digital assets without proper oversight or consumer protections, resulting in substantial financial losses for Oregon investors.

“After building trust with Oregon consumers, Coinbase sold high-risk investments without them being properly vetted to protect consumers,” Rayfield stated, highlighting that Oregonians were lured into complex and volatile markets, leading to significant financial downfalls.

The complaint specifically references the Internet Computer Protocol (ICP) cryptocurrency, which experienced a dramatic price drop from $700 to about $7 after being listed on Coinbase, effectively erasing billions from the market and serving as an example of the dangers posed by unregulated assets.

Oregon’s legal action claims that Coinbase not only approved which cryptocurrencies to list but also managed trade execution and actively promoted these assets to residents, creating an environment vulnerable to manipulation and pump-and-dump schemes that benefit insiders while leaving retail investors exposed to losses.

The lawsuit mirrors allegations previously brought by the SEC, which charged Coinbase in 2023 with allowing the trade of unregistered securities and running an unregistered staking program.

The SEC dropped its case in February 2025, prompting several states to also dismiss their lawsuits against Coinbase.

However, Rayfield argues that state-level intervention is necessary where federal regulators have stepped back, stating that “states must step in where federal regulators have failed to act.”

Coinbase’s chief legal officer, Paul Grewal, criticised the Oregon lawsuit as a “copycat” case, warning that fragmented state-level actions could disrupt efforts to establish a clear federal regulatory framework for digital assets.