According to the plaintiffs, the following are securities: Uniswap (UNI), Tezos (XTZ), Stellar Lumens (XLM), Decentraland (MANA), Polygon (MATIC), Near Protocol (NEAR), Solana (SOL), and Algorand (ALGO).
A recent class-action complaint claims that Coinbase, the biggest cryptocurrency exchange in the US by volume, misled investors into purchasing securities. The CEO of Coinbase, Brian Armstrong, is named in the lawsuit. Customers who claim the company’s business strategy was illegal filed the case. This case is similar to one the corporation has already dealt with.
The lawsuit claims that Coinbase’s sales of digital assets intentionally broke state securities laws since the company was founded. It was filed in California’s Northern District by the legal firm Scott+Scott, which is representing plaintiffs Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard from California and Florida. Near Protocol, Decentraland. Algorand , Uniswap , Tezos , and Stellar Lumens (XLM) are securities.
According to the complainants, Coinbase acknowledged in its user agreement that it is a “Securities Broker,” selling digital asset securities as investment contracts or other securities. As a securities broker/dealer, Coinbase Prime Brokerage was also targeted by the lawsuit.
Through a jury trial, the plaintiffs seek injunctive relief, statutory damages under state law, and complete rescission. This case is similar to another class-action lawsuit that claims Coinbase’s selling of securities caused injury to consumers.
Coinbase, on the other hand, disputed the necessity of securities laws, claiming that secondary sales of crypto assets did not fit the requirements for securities transactions. After considering a number of factors, the court decided to reverse some of the rulings made by the lower court while maintaining others.
This new action is not related to Coinbase’s well-known legal dispute with the SEC over whether tokens sold on Coinbase ought to be categorised as securities. Coinbase has responded to a judge’s ruling for the case to proceed by filing an interlocutory appeal.
John Deaton, the cryptocurrency attorney presently leading a Senate campaign to replace Elizabeth Warren, filed an amicus brief in support of a petition for interlocutory appeal on behalf of 4,701 Coinbase clients on April 26 in the U.S. District Court for the Southern District of New York.
The introduction of Bitcoin exchange-traded funds (ETFs) and an improvement in market performance were the main drivers of Coinbase’s impressive comeback in the first quarter of 2024. Achieving $1 billion in Adjusted EBITDA (profits before interest, taxes, depreciation, and amortisation) for the first quarter, the exchange reported $1.6 billion in total revenue and $1.2 billion in net income.