Coinbase Faces Class-Action Suit Over Alleged Securities Violations

US-based cryptocurrency exchange Coinbase faces a new class-action lawsuit in the Northern District of California for offering unregistered securities, including tokens like ALGO, NEAR, MATIC, UNI, SOL, and others. The plaintiffs accuse Coinbase of operating as an unregistered broker-dealer, allegedly violating state security laws since its inception.

Coinbase Faces Class-Action Lawsuit Over Alleged Unregistered Securities Sales

San Francisco, California - Coinbase, a prominent cryptocurrency exchange headquartered in the United States, is currently embroiled in a new class-action lawsuit filed in the Northern District of California. The suit alleges that Coinbase has engaged in the unlawful offering and sale of securities and investments to the plaintiffs and the class they represent.

The lawsuit meticulously lists a comprehensive array of tokens that it classifies as digital securities. These include Algordand (ALGO), Near Protocol (NEAR), Polygon (MATIC), Uniswap (UNI), Solana (SOL), and others. The plaintiffs contend that Coinbase has "knowingly" and "intentionally" violated state security laws since the inception of its operations by acting as an unregistered broker-dealer.

"Coinbase actively solicited every purchase and sale of Digital Assets through a variety of general solicitations, including those disseminated on its website, social media platforms, traditional advertising channels, and even during Super Bowl commercials. Throughout this period, Coinbase persistently encouraged customers to invest in the Digital Asset securities that it offered on its brokerage platform," the lawsuit alleges.

In addition to Coinbase's alleged failure to register itself as a broker-dealer, the plaintiffs also assert that the company failed to register the securities it sold. Accordingly, they seek a complete rescission (cancellation) of the contracts, injunctive relief to prevent further violations, and statutory damages.

This lawsuit follows a previous action initiated by the U.S. Securities and Exchange Commission (SEC) against Coinbase last year. The SEC alleged that Coinbase engaged in the unregistered sale of securities and specifically identified Cardano (ADA) and other prominent cryptocurrencies as unregistered securities, a significant blow to the cryptocurrency industry.

The SEC achieved a significant victory in March when a court rejected Coinbase's attempt to dismiss the lawsuit. The case is ongoing, with the outcome having potential ramifications for Coinbase and the broader cryptocurrency landscape.