Coinbase Faces Lawsuit: Are Solana (SOL), NEAR (NEAR), Stellar (XLM) Considered Securities?

• US-based cryptocurrency exchange Coinbase is facing a new class-action lawsuit in the Northern District of California.
• The lawsuit alleges that Coinbase has sold securities and investments without proper registration, violating state security laws.
• The list of tokens considered as digital securities includes Algordand (ALGO), Near Protocol (NEAR), Polygon (MATIC), Uniswap (UNI), Solana (SOL), among others.

Coinbase, a leading US-based cryptocurrency exchange, is facing a class-action lawsuit for allegedly violating state security laws by selling unregistered securities. This development could have significant implications for the crypto industry.

Coinbase Hit with Class-Action Lawsuit

Filed in the Northern District of California, the lawsuit accuses Coinbase of “knowingly” and “intentionally” operating as an unregistered broker-dealer. The plaintiffs allege that the exchange has been soliciting purchases and sales of digital assets through various means, including website promotions, social media advertising, traditional advertising, and even Super Bowl commercials.

Unregistered Securities at the Heart of the Dispute

The lawsuit specifically points to a list of tokens that it considers as digital securities, including Algordand (ALGO), Near Protocol (NEAR), Polygon (MATIC), Uniswap (UNI), and Solana (SOL). The plaintiffs argue that Coinbase has failed to register itself or the securities it sells, leading them to seek full recission of contracts, injunctive relief, and statutory damages.

Previous Legal Troubles with the SEC

This is not the first time Coinbase has faced legal challenges regarding securities. In 2021, the U.S. Securities and Exchange Commission (SEC) took Coinbase to court, alleging that the exchange engaged in unregistered sales of securities, including Cardano (ADA) and other major cryptocurrencies. In March, the SEC scored a major win against Coinbase when the court rejected the exchange’s bid to dismiss the lawsuit.

Conclusion

This new class-action lawsuit against Coinbase underscores the ongoing regulatory challenges facing the crypto industry. As the case unfolds, it could set precedents that shape the future of digital asset trading and regulation. It also serves as a reminder to investors to exercise caution and due diligence when dealing with digital assets.