- Allegedly offering tokens like SOL and MATIC as illegal securities, popular crypto exchange Coinbase is being sued.
- Coinbase says it is confident it will refute the accusations in court and denies any misconduct.
Coinbase is facing another class-action lawsuit, this time involving its CEO, Brian Armstrong, as echoed by popular crypto journalist, Collin Wu.
The lawsuit, which was filed in the Northern District of California, details claims that Coinbase has been marketing different tokens, including SOL, MATIC, NEAR, MANA, ALGO, UNI, XTZ, and XLM, illegally as securities, even though the company describes itself as a securities broker in its user agreements.
Coinbase and its CEO Brian Armstrong face a new class-action lawsuit alleging that Coinbase admitted in its user agreement that it was a securities broker, but offered SOL, MATIC, NEAR, MANA, ALGO, UNI, XTZ, and XLM as illegal securities. https://t.co/ML4zJT1MWl
— Wu Blockchain (@WuBlockchain) May 5, 2024
Defining the Allegations: Violations of Securities LawsÂ
The West Coast law firm Scott+Scott filed the action on behalf of the Florida and California plaintiffs who were impacted.
This legal action highlights the increasing attention being paid to the way cryptocurrencies are handled under the present securities rules, a subject that has taken numerous parties before US courts on multiple occasions.
Coinbase is accused of “knowingly, willfully, and repeatedly” breaking state securities laws ever since it started operating, according to the lawsuit. The seriousness of these charges highlights the regulatory uncertainty that still surrounds the cryptocurrency industry.
In response to these grave accusations, Coinbase has promptly released a statement in which it clearly denies any misconduct.
The business affirmed that it believed in the legal system and that it would thoroughly investigate and disprove these allegations when the time was right. This aggressive approach demonstrates Coinbase’s willingness to confront and overcome the legal hurdles head-on.
Reminiscent of Former Legal Difficulties: A Known Legal Environment
Parallel to this complaint, a related ongoing case that also claims consumer damages from the sale of alleged securities on Coinbase’s platform further muddies the story.
The 2nd U.S. Circuit Court of Appeals brought this case back to life after it had previously been dismissed, highlighting the complex and interrelated legal issues the cryptocurrency exchange is now dealing with.
Interestingly, in line with what ETHNews previously disclosed, this is not the same as Coinbase’s ongoing legal dispute with the Securities and Exchange Commission (SEC), which centers on a different but related question: whether tokens sold on Coinbase qualify as securities?
Coinbase has recently engaged in aggressive legal action in this ongoing dispute, contesting a judge’s ruling to let the case go forward.