Oregon Attorney General Dan Rayfield’s lawsuit against Coinbase argues that XRP and other digital assets are unregistered securities.
Rayield sued US-based, publicly traded crypto exchange Coinbase for allegedly violating Oregon’s securities law. In an April 18 announcement, the Oregon Department of Justice said the suit was part of an effort to fill what it described as a regulatory vacuum left by federal agencies under the Trump administration:
“States must fill enforcement vacuum being left by federal regulators who are abandoning these cases under Trump administration,“ the department said.
Coinbase chief legal officer Paul Grewal voiced his frustration over the lawsuit in an April 21 X post. Justin Slaughter, the vice president of regulatory affairs at crypto investment firm Paradigm, pointed out that the lawsuit claims a long list of digital assets, including XRP (XRP), are unregistered securities.
Yarden Noy, partner at crypto legal firm DLT Law, told Cointelegraph that if the court ruled these assets are securities, it “would mostly create more confusion in this regard.” It would not be a binding precedent in other cases, not even within Oregon, he added.
Still, Noy explained that the court decision could be used by regulators and potential plaintiffs to build and make their cases. He said:
“Just like the decision in the Ripple case […] which the complaint seems to be ignoring entirely, did not make all tokens immediately listable on US platforms, I don’t expect the opposite to happen here.”
Related: Court grants 60-day pause of SEC, Ripple appeals case
A long list of crypto assets
Paradigm’s vice president of regulatory affairs Justin Slaughter called the action a “kitchen sink lawsuit.” The list of tokens cited includes high-profile altcoins such as Aave (AAVE), Avalanche (AVAX), Uniswap (UNI) and Near Protocol (NEAR), as well as the wrapped version of Terra’s collapsed token, wLUNA — but not LUNA itself.
The complaint does not explain why certain wrapped assets were included while others were excluded. It states:
“Coinbase—through the Coinbase Platform and Prime—has made available for trading in Oregon crypto assets that are offered and sold as investment contracts, and thus as securities. This includes, but is not limited to, the units of each of the crypto securities further described below.“
Related: Circle, BitGo about to apply for bank charters, others may follow: WSJ
XRP in the legal crosshairs once again
Ripple Labs, the firm behind XRP, has already faced a years-long legal battle with the US Securities and Exchange Commission. Ripple was hit with a lawsuit by the SEC in late 2020, calling XRP a “$1.3 billion unregistered securities offering.”
The same lawsuit was dropped by the SEC in late March, but it provided little legal certainty for the crypto industry. Oregon’s complaint comes amid growing concern among state officials that federal regulators are pulling back from crypto enforcement. The suit appears to be part of a broader trend of state-level authorities stepping in.
Before Oregon’s action, XRP’s legal standing was being viewed as increasingly clear. Coinbase — a crypto exchange known for its relatively cautious stance on regulatory matters — added XRP futures to its derivatives trading platform on April 21.
Magazine: XRP win leaves Ripple and industry with no crypto legal precedent set
