A consortium of investors has initiated a class-action legal action against Coinbase, the well-known American cryptocurrency platform. They claim that the company has been providing and trading unregistered securities and investment opportunities to its clientele.
This lawsuit has been lodged in the Northern District of California, specifically targeting Coinbase Global Inc. and its CEO, Brian Armstrong, as the defendants.
Plaintiffs assert that some tokens on Coinbase are deemed securities
The plaintiffs contend that Coinbase has functioned as an unlicensed broker-dealer from the start, offering and trading various digital assets categorized as securities under California law.
The lawsuit specifies numerous tokens, such as Algorand (ALGO), Near Protocol (NEAR), Polygon (MATIC), Uniswap (UNI), Solana (SOL), among others, as digital securities.
The plaintiffs further allege that Coinbase knowingly and willfully breached California securities laws by neglecting to register as a broker-dealer and failing to register the offered securities. Additionally, they claim that Coinbase actively promoted these digital assets through various channels including its website, social media, traditional advertising, and even Super Bowl commercials to encourage investment.
According to the complaint, Coinbase solely presented these assets as investment opportunities without any other stated use case, continuing to provide investment-related updates and bulletins to customers.
The lawsuit seeks full rescission of all digital asset transactions on Coinbase, along with injunctive relief and statutory damages. This legal action follows a previous move by the US Securities and Exchange Commission (SEC), which accused Coinbase of selling unregistered securities. In March 2024, the court denied Coinbase’s attempt to dismiss the lawsuit, potentially bolstering the SEC’s position.
If found guilty, Coinbase could incur substantial penalties and damages, and the case could establish a significant precedent for cryptocurrency regulation in the US.
May 2024, Cryptoniteuae
