Coinbase has formally requested the U.S. Department of Justice (DOJ) to intervene in state-level cryptocurrency enforcement actions, arguing that inconsistent state regulations are creating a fractured legal landscape. In a 14-page letter sent on Monday, Chief Legal Officer Paul Grewal called for the DOJ to support congressional efforts to pass sweeping preemption measures that would prevent states from pursuing enforcement against federally regulated digital assets.
The move comes in response to an April lawsuit filed by Oregon Attorney General Dan Rayfield, who accused Coinbase of selling unregistered securities to state residents. This case mirrored allegations previously made by the Securities and Exchange Commission (SEC), which dropped its federal case against Coinbase in February. Since then, several other states including Vermont, South Carolina, and Kentucky have filed similar enforcement actions.
Grewal described the situation as "government run amok," stating on X that "When Oregon can sue us for services that are legal under federal law, something's broken." Coinbase has moved the Oregon case to federal court and filed a separate lawsuit against Oregon Governor Tina Kotek, with a status hearing scheduled for October 29.
The timing coincides with progress in Congress on digital asset market structure legislation. The U.S. Senate Banking Committee is expected to soon vote on a bill that would delineate regulatory responsibilities between the SEC and Commodity Futures Trading Commission (CFTC). Grewal urged the DOJ to support provisions that would explicitly preempt state "blue-sky laws," exempt federally regulated digital assets from new state licensing requirements, and apply these rules retroactively.
