- A class-action complaint has been filed against Coinbase, alleging violation of US securities laws.
- The complaint accuses Coinbase of operating in a “shadowy crypto ecosystem” and offering unregistered “digital asset securities”.
- The U.S. Securities and Exchange Commission (SEC) has also accused Coinbase of violating securities laws, launching a lawsuit against the exchange in June 2023.
Coinbase, a leading US crypto exchange, faces allegations of violating securities laws, according to a recently filed class-action complaint. The case adds to the legal challenges the company is already facing from the SEC.
Class-Action Complaint Against Coinbase
A class-action complaint has been filed in the Northern District of California’s San Francisco division, alleging that Coinbase has violated US securities laws. The complaint accuses the top US crypto exchange of operating as part of a “shadowy crypto ecosystem operating just outside of the law.”
Allegations of Unregistered Digital Asset Securities
The complainants accuse Coinbase of offering numerous unregistered “digital asset securities,” including the layer-1 blockchain projects Solana (SOL), NEAR Protocol (NEAR), Algorand (ALGO), Stellar (XLM) and Tezos (XTZ); the blockchain scaling solution Polygon (MATIC); the decentralized exchange Uniswap (UNI); and the Ethereum (ETH)-based virtual reality platform Decentraland (MANA).
SEC Lawsuit Against Coinbase
In addition to the class-action complaint, the U.S. Securities and Exchange Commission (SEC) has also accused Coinbase of violating securities laws, launching a lawsuit against the exchange in June 2023. Coinbase has argued that trading digital assets doesn’t qualify as an “investment contract” under the Howey Test, an assessment created by the Supreme Court more than 90 years ago to determine whether assets should be classified as securities.
Conclusion
The class-action complaint and SEC lawsuit represent significant legal challenges for Coinbase. The outcomes of these cases could have far-reaching implications for the crypto industry, particularly in terms of how digital assets are classified and regulated.
