Oregon Attorney General Dan Rayfield is planning a lawsuit against crypto exchange Coinbase, alleging the company is selling unregistered securities to residents of the US state, after the United States Securities and Exchange Commission's (SEC) dropped its federal case against the exchange.

According to Coinbase's chief legal officer, Paul Grewal, the lawsuit is an exact "copycat case" of SEC’s 2023 lawsuit against the exchange, which the federal agency agreed to drop in February. Grewal added:

"In case you think I’m jumping to conclusions, the attorney general's office made it clear to us that they are literally picking up where the Gary Gensler SEC left off — seriously. This is exactly the opposite of what Americans should be focused on right now."

The lawsuit signals that the crypto industry still faces regulatory hurdles and pushback at the state level, even after securing several legal victories on the federal level. Pushback from state regulators could fragment crypto regulations in the US and complicate cohesive national policy.

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Several US states drop lawsuits against Coinbase following SEC moves

The SEC reversed its stance on cryptocurrencies following the resignation of former chairman Gary Gensler in January.

Gensler's exit triggered a wave of dropped lawsuits, enforcement actions and investigations against crypto firms, including Coinbase, Uniswap, and Kraken.

Several US states followed the SEC's lead and also dropped their lawsuits against Coinbase in the first quarter of this year.

Vermont, one of the 10 US states that filed litigation against the exchange, dropped its lawsuit on March 13.

The legal order specifically cited the SEC's regulatory pivot and the establishment of a crypto task force by the agency as reasons for dropping the lawsuit.

South Carolina dismissed its lawsuit against Coinbase two weeks after Vermont rescinded its litigation against the exchange giant.

Kentucky's Department of Financial Institutions became the third state-level regulator to dismiss its Coinbase lawsuit, ending the litigation on March 26.

Despite the legal victory, Coinbase's Grewal called on the federal government to end the state-by-state approach of crypto regulation and focus on passing clear market structure policies at the federal level.

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