Coinbase, a popular cryptocurrency exchange, is currently facing serious allegations of violating securities laws. Multiple individual complainants have accused the exchange of deliberately disregarding these laws. Furthermore, a class action complaint has been filed against Coinbase, claiming that the exchange deceived investors into purchasing securities. The complainants who have filed the formal complaint are now accusing Coinbase of securities law violations.
The complaint specifically identifies SOL, MATIC, NEAR, MANA, ALGO, UNI, XTZ, and XLM as securities. As a result, five plaintiffs have taken legal action against Coinbase Global and its CEO, Brian Armstrong. They have filed a class action lawsuit against the company.
According to the complainants, Coinbase has knowingly and persistently ignored securities laws in the states of California and Florida. They argue that Coinbase, in its user agreement, has acknowledged its role as a “Securities Broker.” This means that the exchange sells digital assets as securities, along with investment contracts and other products. The complaint also targets Coinbase prime brokerage, as it is considered a securities broker/dealer.
The complainants also claim that Coinbase Earn accounts have violated securities laws by promising higher returns. In their demand for a jury trial, the plaintiffs are seeking injunctive relief, statutory damages under state law, and full recession. This case bears similarities to the SEC complaint and other ongoing class actions against Coinbase.
Coinbase’s legal battle with the United States SEC has been further complicated by the concept of “investment contracts.” Coinbase’s interlocutory appeal focused on this concept, as it conflicts with the SEC’s perspective on investment contracts. However, Coinbase’s Chief Legal Officer, Paul Grewal, believes that the exchange has a stronger chance of winning the case. He argues that decisions made by the Second Circuit and the Supreme Court support Coinbase’s position. The US Court of Appeals for the Second Circuit has clarified that secondary transactions of cryptocurrencies are not considered securities due to the absence of investment contracts.
In other news, Tesla has announced that it now accepts Dogecoin as payment for certain items, leading to a rally in the price of DOGE. This development has garnered significant attention in the crypto community.
