On April 18, 2025, the State of Oregon brought a civil enforcement action against Coinbase Global, Inc. (“Coinbase”) for the alleged sale of unregistered securities. In a press release, Oregon Attorney General Dan Rayfield openly acknowledged the action was in response to the United States Securities and Exchange Commission (“SEC”) dropping its own case against Coinbase, noting his belief that “states must fill the enforcement vacuum being left by federal regulators who are giving up under the new administration.” This begs the question: is the federal government’s resetting of its approach to crypto regulation an “enforcement vacuum” or a return to order?
Oregon’s complaint asserts that certain digital assets on Coinbase’s platform are investment contracts and, thus, securities under Oregon law. In order to be offered for sale in Oregon, a security must be registered or fall under an exemption (e.g., “Federal covered securities may be offered and sold in [Oregon] without registration,” subject to administrative conditions). ORS 59.049, 59.055, 59.115. Oregon statutorily defines a security to include “investment contracts” (see ORS 59.015), and its courts use a modified version of a test established by the United States Supreme Court in SEC v. W.J. Howey, 328 U.S. 293 (1946), to determine if a particular investment is a security. Oregon claims that Coinbase solicited and participated, or materially aided, in the sale of unregistered crypto securities, resulting in violations of Oregon’s blue sky laws.
The suit is aggressive in that it bumps up against the SEC’s historically exclusive mandate to regulate national exchanges, and for that reason, is vulnerable to legal challenge. In addition, consistent with the state’s press release, it was apparently brought in direct response to the SEC’s dismissal of its Coinbase enforcement action. However, the dismissal of this case and those against other crypto firms are hardly the only things the SEC has done in the crypto space of late. Since President Trump reentered the White House, the SEC has undertaken numerous steps to bring some order to crypto regulation. In recent remarks, newly-minted SEC Chair Paul Atkins stated that the SEC is committed to establishing a “rational, fit-for-purpose framework for crypto assets,” enabling innovation that has been “stifled for the last several years due to market and regulatory uncertainty that unfortunately the SEC has fostered.”
Consistent with this objective, the SEC has established a Crypto Task Force whose purpose is to “help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.” The Task Force has hosted industry roundtables addressing key subjects relevant to crypto regulation. At the inaugural roundtable, then-Acting Chair Mark Uyeda remarked that the “approach of using notice-and-comment rulemaking or explaining the Commission’s thought process through releases—rather than through enforcement actions—should have been considered for classifying crypto assets under the federal securities laws.” Topics addressed by roundtables thus far include defining the security status of digital assets, tailoring regulation for crypto trading, know-your-customer considerations for crypto custody, and tokenization. A fifth roundtable is scheduled for June 9 on the subject of “DeFi and the American Spirit.” The roundtables are broadcast live to the public and archived for later viewing through links posted on the SEC’s website.
Moreover, at a conference in March 2025, Uyeda remarked that the SEC would conduct economic analyses that would help the agency “distinguish between approaches that are effective and efficient, versus those that are effective but costly.” He added that the SEC is “required by statute to consider efficiency, competition, and capital formation in its rulemaking. Our Division of Economic and Risk Analysis has developed robust procedures that build on this statutory mandate, recognizing that high-quality economic analysis is an essential part of our rulemaking.” Industry participants might fairly claim that these efforts are far from the SEC “giving up” and leaving an “enforcement vacuum” that states must rush to fill.
Taking the opposite tack of Oregon, several states have yielded in their pursuit of Coinbase. The Coinbase suit that the SEC dismissed was originally brought in June 2023, alongside ten states that initiated actions claiming the company’s administration of its crypto staking program resulted in unregistered securities offerings. According to the SEC’s press release accompanying its complaint, these ten states were part of a task force that coordinated their efforts with the SEC. After the SEC dismissed its case against Coinbase with prejudice in February 2025, five of those ten states—Vermont, Alabama, Illinois, Kentucky and South Carolina—followed suit. Some of those state regulators that withdrew their Coinbase actions have highlighted the SEC’s ongoing rulemaking efforts in their rescission papers. For instance, the Alabama Securities Commission’s Consent Order rescinding its June 6, 2023 Show Cause Order without prejudice cited the new SEC Crypto Task Force’s work and stated that “it would be apt to allow policy makers time to consider regulatory constructs.” The other five states that participated in the task force—California, New Jersey, Maryland, Washington and Wisconsin—have left their enforcement actions against Coinbase in place, at least for the time being.
While states may go their own way when they sense a regulatory gap, restraint may be the better course where active efforts are underway at the federal level to fill that gap with a legal framework informed by stakeholder input. Emergent state actions like Oregon’s present novel complications in the search for regulatory clarity. Given this state of play, both crypto industry participants and investors stand to benefit from governmental patience and coordination as the SEC’s Crypto Task Force performs its work.