Fresh legal issues for Coinbase, this time in Oregon. Oregon Attorney General Dan Rayfield sued, charging the exchange with selling unregistered securities to the state’s residents. Despite this seeming contradiction, the U.S. Securities and Exchange Commission (SEC) did just that when it recently stopped its federal case against Coinbase earlier this spring. This litigation is a profound transformation of federal crypto law enforcement. Investors and industry observers await the case with bated breath for its long-term influence on U.S. crypto regulation.
Coinbase’s Chief Legal Officer, Paul Grewal was quick to react to the Oregon suit. He brushed it off as simply a “copycat” of the SEC’s original complaint. Grewal underscored in his statement that the complaint fails to address other key legal precedents. He pointed to Judge Torres’ 2023 final ruling, specifically that XRP is “not a security in all circumstances.” This ruling was a watershed moment for the entire crypto industry.
As XRP continues to flounder in a long-term price rut, the mid-filing timing of this lawsuit further complicates its quest for market independence. At the time of writing, XRP is sitting at $2.08 with very low trading volume. Despite the continuing legal challenges, a breakout to $2.25 may not be out of the question, analysts argue. If history is any guide, many expect a double-digit rally by July.
At the same time, in Asia, HashKey Capital has recently launched a fund that tracks XRP, aimed at institutional investors. This move is a further sign of institutional interest in XRP remaining strong, even with the currently uncertain regulatory climate in the U.S. market. The surprising turn of developments in Asia versus the U.S. underscores the increasingly fragmented, divided crypto landscape — on a global basis.
That’s why, earlier this year, the U.S. SEC opted to drop its federal lawsuit against Coinbase. This action represented a watershed moment in how federal agencies intend to enforce cryptocurrency regulations. Oregon’s new lawsuit against crypto exchanges illustrates a big problem for crypto exchanges in the United States. State-level regulatory scrutiny continues to be a major hurdle. This case does potentially set important precedents. Beyond today, it will set the tone for how states should or should not classify or regulate digital assets.
