- Coinbase, a leading cryptocurrency exchange, and its CEO, Brian Armstrong, are facing a new lawsuit from a group of plaintiffs in California and Florida. The plaintiffs allege that they were misled into buying unregistered securities.
- This is not the first legal challenge for Coinbase, following the United States Securities and Exchange Commission (SEC) lawsuit in mid-2023.
- The lawsuit alleges that Coinbase sold unregistered securities, including popular cryptocurrencies like Solana (SOL), Polygon (MATIC), Near Protocol (NEAR), Decentraland (MANA), Algorand (ALGO), Uniswap (UNI), Tezos (XTZ), and Stellar Lumen (XLM).
Coinbase faces a new lawsuit alleging the sale of unregistered securities, adding to the exchange’s growing list of legal challenges. The plaintiffs are seeking complete rescission, statutory damages, and injunctive relief.
Lawsuit Alleges Coinbase Sold Unregistered Securities
The class-action lawsuit was filed in the United States District Court for the Northern District of California, San Francisco Division. The plaintiffs include Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard. They argue that Coinbase acknowledged in its user agreement that it operated as a securities asset broker. Despite this, it continued to provide access to assets that the lawsuit claims are unregistered securities.
Coinbase Faces Legal Battles on Multiple Fronts
This recent lawsuit is different from Coinbase’s ongoing legal dispute with the SEC, which also questions whether tokens offered on the exchange should be classified as securities. Notably, the company recently filed an interlocutory appeal in response to a judge’s ruling allowing the case to proceed. In a separate case, several Coinbase customers have initiated legal action against the company over its management of the GYEN stablecoin, which they claim was not stable. According to this lawsuit, Coinbase actively promoted and traded the GYEN token despite knowing its high volatility, resulting in significant losses for investors.
Conclusion
The new lawsuit adds to the mounting legal challenges for Coinbase, which is already grappling with an SEC lawsuit and customer complaints over the GYEN stablecoin. The outcome of these cases could have significant implications for the crypto exchange and the broader cryptocurrency industry.
