Coinbase faces new charges of defrauding investors.
Coinbase, the largest cryptocurrency exchange in the United States and its CEO, Brian Armstrong, is facing a new class-action lawsuit on charges of defrauding investors by buying securities. The lawsuit comes from customers who say the company's business model was illegal. This lawsuit echoes what the company has faced in the past.
The suit, filed by the law firm Scott+Scott in the Northern District of California, representing plaintiffs Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edward Cordy and Brett Maggard from California and Florida, alleges that Coinbase's sale of digital assets knowingly violated government securities. Laws since the establishment of the company.
On the record, the plaintiffs identified Solana ( SOL ), Polygon ( MATIC ), Protocol Near ( NEAR ), Decentraland ( MANA ), Algorand ( ALGO ), Uniswap ( UNI ), Tezos ( XTZ ), and Stellar Lumens ( XLM ). They are guarantees.
The complainants acknowledge that Coinbase is a “securities broker” in its user agreement, selling digital asset securities as investment contracts or other securities. The plaintiff took on Coinbase Prime Brokerage as a broker/distributor.
The plaintiffs seek complete rescission, statutory damages under state law and relief from a jury trial. The lawsuit appears to be another class-action suit alleging harm to consumers from the sale of securities by Coinbase.
However, Coinbase argued that the secondary sale of crypto assets did not meet the criteria for a securities transaction, arguing the need for securities regulations. The court examined various cases and eventually overturned some lower court decisions and upheld others.
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This new lawsuit is separate from Coinbase's highly publicized legal battle with the SEC over whether tokens sold on Coinbase should be classified as securities. Coinbase recently filed an interlocutory appeal in response to a judge's decision to allow the case to proceed.
In a filing April 26 in the US District Court for the Southern District of New York, attorney John Deaton, who is currently running the Senate campaign to unseat Sen. Elizabeth Warren, filed an amicus brief on behalf of 4,701 people in support of the interlocutory appeal. Coinbase customers.
Coinbase reported a strong recovery in the first quarter of 2024, supported by market performance and the launch of Bitcoin exchange-traded funds (ETFs). The exchange posted $1.6 billion in total revenue and $1.2 billion in net income for the first quarter.
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