Cryptocurrency exchange Coinbase and its CEO Brian Armstrong are facing a new class action lawsuit alleging that investors were duped into buying securities and that the company’s business model is illegal. ing.
lawsuit It has been submitted Represented California and Florida plaintiffs Gerald Aceves, Thomas Huang, Edwin Martinez, Tiffany Smoot, Edward Cordy, and Brett Maggard in the United States District Court for the Northern District of California, San Francisco District. claimed that Coinbase’s digital asset sales knowingly violated the state’s securities regulations. Laws that have existed since the company was established.
The lawsuit names Solana (SOL), Polygon (MATIC), Near Protocol (NEAR), Decentraland (MANA), Algorand (ALGO), Uniswap (UNI), Tezos (XTZ) and Stellar Lumens ( XLM) tokens are securities.
The plaintiffs allege that Coinbase acknowledged in its user agreement that it is a “securities broker” and sells digital asset securities as investment contracts and other securities on exchanges. They also claim that Coinbase Prime intermediary is a stock broker.
The plaintiffs are seeking full rescission, statutory damages under state law, and injunctive relief through a jury trial. The lawsuit is similar to another class action lawsuit alleging harm to consumers from Coinbase’s securities sales.
Coinbase disputed the relevance of securities regulations, arguing that secondary sales of crypto assets do not meet securities trading standards.
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This new lawsuit is separate from Coinbase’s highly publicized legal battle with the U.S. Securities and Exchange Commission, which also questioned whether tokens sold on Coinbase should be classified as securities. It is. Coinbase recently filed an interlocutory appeal in response to a judge’s decision to allow the lawsuit to proceed.
In an April 26 filing in the U.S. District Court for the Southern District of New York, John Deaton, a cryptocurrency lawyer currently campaigning to oust Sen. Instead, a court brief was filed in support of the interlocutory appeal. He has 4,701 Coinbase customers.
Coinbase reported a strong recovery in Q1 2024, supported by rising market performance and the launch of its Spot Bitcoin (BTC) exchange-traded fund. The exchange reported total revenue of $1.6 billion and net income of $1.2 billion in the first quarter, with adjusted earnings before interest, taxes, depreciation and amortization of $1 billion.
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