Coinbase has officially turned to the U.S. Department of Justice (DOJ) and encouraged federal regulators to take action on inconsistent state regulations against crypto.
Coinbase’s letter to the DOJ comes after the state of Oregon filed a securities case against the exchange in April, despite the U.S. Securities and Exchange Commission (SEC) dropping its own case against Coinbase earlier this year.
In the letter to the DOJ, Coinbase’s Chief Legal Officer, Paul Grewal, explained that the current system of state regulations is equivocal, works against innovation, confuses compliance, and actively harms consumers.
Grewal said federal laws are the only way possible to provide the clarity necessary for crypto firms to know they can safely operate in the U.S.
Oregon Case Raises Questions of Federal Preemption
The legal battle between Oregon and Coinbase illustrates the mounting friction between state and federal regulation of the crypto sector.
Dan Rayfield, the Oregon Attorney General, alleged that Coinbase sold its customers unregistered securities, even though the SEC resolved similar charges against the crypto exchange.
In defence of Coinbase, Grewal posted on X, “When Oregon can sue us for services that are legal under federal law, something’s broken.”
Since then, Coinbase has sought to transfer the Oregon case to a federal judge in the U.S. District Court for the District of Oregon.
Additionally, it filed a separate lawsuit against Governor Tina Kotek at the state level in July.
Coinbase claims that state enforcement actions that rely on “novel and flawed” interpretations of existing securities laws produce regulatory unpredictability and undermine the adoption of cryptocurrency on the national level.
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Push for Congressional Action and Legislative Clarity
In its appeal, Coinbase asked the DOJ to ask Congress to adopt broad preemption provisions that would supersede any state law in conflict.
Grewal noted the presence of the CLARITY Act and the Responsible Financial Innovation Act of 2025 as pending legislation with a crypto focus on the books that could act as comprehensive, long-term legal constructs.
According to Coinbase, these bills would clarify the scope of contradictions that define which digital assets would be considered securities and how federal regulators should designate protocols for exchanges.
Coinbase argued that by establishing consistency in national crypto policy under federal guidance, the U.S. could maintain its competitive edge in digital innovation, consistent with investor protection.
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SEC’s Shifting Approach Adds to Legal Complexity
Coinbase’s request comes against the backdrop of a more comprehensive change in approach that the SEC is taking relative to cryptocurrency regulation.
On September 4th, the SEC issued a rulemaking agenda that looks to establish a possibility for digital assets to trade on a regulated exchange, while also clarifying broker/dealer rules, according to UnoCrypto.
The agency called the draft an attempt to find a balance between protecting investors and balancing the need for innovation, while also lowering compliance costs for firms.
It is a trend that has continued since the SEC’s unexpected withdrawal of its probe into PayPal’s PYUSD stablecoin in April.
Also, the SEC won a legal case in June against Keith Crews, allowing him to defraud 200 investors with a fictitious project titled “Stemy Coin”, UnoCrypto reported.
The differences in SEC responses to digital asset enforcement issues highlight the inconsistency of federal cryptocurrency enforcement, which supports Coinbase’s effort to seek clarity from regulations.
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