Key Points:
Coinbase class action lawsuit is being filed for alleged breaching securities laws.
Plaintiffs claim intentional violations by Coinbase, including in prime brokerage and promotions.
Coinbase argues amid escalating legal battles with customers and the SEC.
Coinbase, the leading cryptocurrency exchange in the United States, is embroiled in yet another legal battle as customers file a fresh lawsuit, alleging the company's business model violates securities laws.
Coinbase Class Action Lawsuit Is Busy With Securities Solicitation Allegations
The Coinbase class action lawsuit, echoing a previous case against the exchange, accuses it of misleading investors into purchasing securities. Named complainants, including Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard, claim Coinbase intentionally violated California and Florida securities laws, citing the company's admission of being a "Securities Broker" in its user agreement.
The complaint specifically targets Coinbase's operations, including its prime brokerage and Coinbase Earn accounts, which allegedly promoted higher-yield investments without sufficient disclosure, violating securities laws. Additionally, the Coinbase class action lawsuit asserts that digital assets listed on the exchange, including Algorand, Decentraland, Polygon, Near Protocol, Uniswap, Solana, Stellar Lumens, and Tezos, are securities.
Coinbase's Defense: Contesting Claims Amid Escalating Legal Battles
In response, Coinbase has labeled the claims as "legally baseless" and expressed confidence in the judicial process. This legal confrontation adds to Coinbase's ongoing battle with the Securities and Exchange Commission (SEC) over the classification of tokens sold on its platform. Notably, Coinbase recently filed an interlocutory appeal contesting a judge's decision to allow the SEC case to proceed.
Attorney John T. Jasnoch, representing the plaintiffs, has a track record of involvement in class-action litigation against cryptocurrency firms. Meanwhile, Coinbase's Chief Legal Officer, Paul Grewal, remains optimistic about the company's chances of success, citing recent legal clarity from the US Court of Appeals for the Second Circuit regarding secondary crypto sales not being considered securities.
This latest lawsuit underscores the increasing legal scrutiny faced by cryptocurrency exchanges and projects, particularly regarding the classification of digital assets under securities laws.
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