A lawsuit has been filed against the crypto trading firm Coinbase. The company is accused of selling and offering securities to the public without having the necessary registration. The lawsuit, brought by private complainants, concerns Coinbase’s misleading statements regarding some cryptocurrencies offered on Its platform, which consequently resulted in big losses for investors who are not in any way affiliated with Coinbase.
Allegations and Claims against Coinbase
The complaint names several crypto-assets like Algorand (ALGO), Decentraland(MANA), Solana(SOL), Stellar(XLM), Tezos(XTZ), Uniswap(UNI), Polygon(MATIC), and Near Protocol(NEAR) that were not registered with Securities and Exchange Commission and were not-exempt from security laws. Investors assert that this was done using many methods like site promotion, social media marketing, traditional marketing, and even television commercials so that people, in turn, would buy into the investment system.
According to the complaint, Coinbase is alleged to have acted in a way that knowingly and purposefully violates laws of State securities by operating as an unregistered broker-dealer. On the contrary, the defendants claim that Coinbase overlooked two essential aspects: registration and sales of securities. That is where the illegalities or violations start, and they want to kill all the contracts and seek relief via a civil lawsuit for the damages.
Coinbase’s response
This lawsuit follows the wave of crypto industry stakeholders speculating about how government authorities would regulate crypto exchanges and digital asset offerings. The SEC also announced a lawsuit last year against Coinbase, claiming the latter sold securities with unregistered status. Even though the finality has yet to be given, the case implies a more generalized regulatory challenge caused by the crypto space.
Coinbase has not said anything about the suit. Nevertheless, the exchange has always underlined its determination to maintain standards with regulatory bodies and its aims to guarantee full transparency and legality in all its business models.
The potential consequence is that the lawsuit’s follow-up ends in terrible suggestions against the company responsible, which clouds the identity of digital currencies and the platforms that permit their trading.
