Coinbase Pushes DOJ to Block State Crypto Crackdowns, Cites Risks

September 17, 2025

Crypto exchange Coinbase has formally urged the U.S. Department of Justice (DOJ) to intervene in state-level crypto enforcement, warning that inconsistent “blue-sky” regulations could hinder industry growth.

Key points:

  • Coinbase urged the DOJ to intervene in state-level crypto enforcement, warning inconsistent “blue-sky” regulations could stifle industry growth.
  • The company called for Congress to adopt broad preemption measures, exempting federally regulated digital assets from state licensing and regulatory requirements.
  • Acting on Coinbase’s request could establish federal oversight as the primary authority, providing clearer rules, reducing legal uncertainty, and fostering a more innovation-friendly crypto environment.

In a 14-page letter dated September 15, Coinbase Chief Legal Officer Paul Grewal called on federal authorities to address state-level enforcement targeting crypto firms, urging the DOJ to encourage Congress to introduce comprehensive preemption measures.

Grewal noted that recent government initiatives aimed at promoting fairness, consistency, and uniformity in digital asset regulation have begun to address the damage caused by the prior administration’s “regulation-by-enforcement” approach.

However, Grewal argued that certain states are persisting with this approach through “novel, expansive, and flawed interpretations of their own securities laws” and by introducing new crypto licensing frameworks aimed at undermining the federal government’s pro-innovation agenda.

Grewal cited the Oregon Attorney General’s lawsuit against Coinbase, which alleges that numerous digital assets on the exchange are unregistered securities, and contends that other states are being encouraged to “fill” what is described as an “enforcement vacuum being left by federal regulators.”


Furthermore, Grewal urged that the DOJ submit a formal views letter to Congress advocating for broad preemption measures in upcoming market-structure legislation. He emphasized that any preemption framework should classify federally regulated digital assets as exempt from state blue-sky laws, clarify that new state licensing and regulatory requirements do not apply to crypto intermediaries, and ensure the provisions are applied retroactively.

If the DOJ acts on Coinbase’s request, it could mark a major shift in how digital assets are regulated in the U.S., establishing federal oversight as the dominant authority over patchwork state rules. 

Such a move would provide clearer guidance for crypto firms navigating a fragmented regulatory environment, reducing the risk of conflicting state enforcement actions and legal uncertainty. By promoting uniform standards and preemption provisions, the federal government could foster a more innovation-friendly landscape, encouraging investment and growth within the sector.

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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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