A vice president of cryptocurrency exchange Coinbase, which Oregon’s Attorney General Dan Rayfield is suing, said he’s been trying to understand why Oregon is the only state challenging the company after the federal Securities and Exchange Commission earlier this year agreed to drop its own civil suit against it.
So Coinbase filed its own public records lawsuit against Oregon’s governor, after it alleged the state “stonewalled” its requests for records to learn what prompted the state’s legal action, including contracts between the Oregon Department of Justice and two out-of-state law firms that are representing the state in its suit against the cryptocurrency company.
This week, Coinbase obtained a 2023 agreement between the state Justice Department and the Washington, D.C-based law firm Cohen Milstein Sellers & Toll, which is one of two firms representing Oregon in its suit against Coinbase.
In it, the state agreed to hire the Cohen Milstein firm to investigate Coinbase but would not pay the firm unless legal action was taken against Coinbase and a court awarded damages to the state.
The firm donated to both Rayfield’s and his predecessor Ellen Rosenblum’s campaigns. It donated $10,000 to Rayfield in 2024, and $10,000 to Rosenblum in 2012, according to state records.
“So you have someone that’s been empowered to investigate a party, but they only get paid if it leads to the conclusion that we should be sued and ultimately charged and fined,” said Ryan VanGrack, vice president of legal. “That turns the investigation, the public interest on its head, where you’re not looking at issues impartially, but you have a tremendous financial incentive to get to ‘yes,’ because that’s the only way you get paid.”
It’s not unusual for state attorneys general to hire outside law firms to help in legal cases.
But VanGrack argues that what’s unusual with the Oregon scenario is that campaign donors typically don’t get hired to represent a state, as about 22 states have pay-to-play regulations that restrict political contributions from companies or executives seeking government contracts. Oregon does not have that regulation.
That, coupled with the 2023 agreement that taps the D.C. firm to both investigate Coinbase and not pay the firm unless it takes legal action against Coinbase and wins, is highly unusual, VanGrack contends.
Rayfield defended the state’s suit against Coinbase, calling it the “first in the nation to protect consumers,” as well as the state’s use of outside lawyers to handle the litigation for the state.
“Coinbase is now deploying a set of common and malicious tactics in an attempt to create a sideshow,” Rayfield said in an email. “Coinbase is trying to use high paid lawyers to bully the state of Oregon and scare off other attorneys general from taking enforcement actions in their states. They won’t succeed.”
The attorney general said other states have relied on the use of outside lawyers to support their offices in suits against opioid manufacturers, big tobacco, and biotech giant Monsanto.
“It’s a proven tactic to hold powerful corporations accountable, save taxpayers’ dollars, and reduce risk to the state,” Rayfield said in a written statement. “Coinbase’s twitter rants won’t stop our laser focus on protecting Oregonians.”
He did not directly respond to the financial terms of the state’s retention agreements with the law firm.
Rayfield filed suit against Coinbase in April, saying the legal challenge was needed because of the dismantling of federal regulatory agencies.
The lawsuit, initially filed in Multnomah County Circuit Court, alleges Coinbase is violating the state’s securities laws by facilitating the sale of virtual currencies that don’t come with proper disclosures.
“You don’t go in for a medical procedure without knowing the risks,” Rayfield said in a press release. “It’s the same for everyday folks who want to invest in cryptocurrency. I am committed to protecting Oregon’s investors so they’re not taken advantage of.”
Coinbase asked to transfer the case to federal court, but lawyers for the state are arguing that the suit be returned to state court.
Meanwhile, Coinbase put in multiple public records requests to the governor’s office in May, including a request for the Justice Department’s retention agreements with the two out-of-state law firms representing the state in its legal challenge against Coinbase. It then sued the governor, alleging her office was not responsive to the records requests.
Coinbase initially only received an April 2025 agreement that an assistant attorney general in Rayfield’s office signed with the out-of-state firm.
This week, it obtained the 2023 agreement, VanGrack said.
The 2023 agreement with the Cohen Milstein firm says it will “advise and assist DOJ with investigation and litigation relating to matters involving potential litigation against Coinbase and related defendants involving participation in sales of unregistered securities.”
The state Department of Justice “shall not otherwise pay the firm,” but the firm may request the court award it fees and expenses, to be paid by defendants, “in litigation arising from its legal services,” the agreement says.
VanGrack took to social media this week to blast the Oregon legal arrangement.
“Is it any surprise Oregon later filed?” VanGrack posted on X. “No wonder Oregon stands alone – the only state bringing these charges against CB. Nothing fair, impartial or transparent about that closed-door arrangement. Govt officials should act in the public interest, not in the financial interest of their out-of-state donors.”
Earlier this week, the U.S. House of Representatives approved a bill, the Digital Asset Market Clarity Act, which creates cryptocurrency market regulations that Coinbase actively pushed for, including the weakening of the Securities and Exchange Commission to police crypto. The bill gives more oversight authority to a different agency, the Commodity Futures Trading Commission. The bill still needs approval from the U.S. Senate.
–Maxine Bernstein covers federal court and criminal justice. Reach her at 503-221-8212, mbernstein@oregonian.com, follow her on X @maxoregonian, on Bluesky @maxbernstein.bsky.social or on LinkedIn.
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