Coin Edition -
- Coinbase (NASDAQ:COIN) is sued in a class action, claiming its token sales violate securities laws.
- The lawsuit questions Coinbase’s decade-long legality of its business model.
- The outcome of Coinbase’s ongoing SEC battle could influence this lawsuit’s fate.
Coinbase, the leading U.S. cryptocurrency exchange, is embroiled in a new class action lawsuit alleging its business model is fundamentally illegal. The suit was filed by Scott+Scott in the Northern District of California on Friday, April 3. It represents plaintiffs from California and Florida who claim Coinbase has consistently violated state securities laws.
Specifically, the plaintiffs claimed that Coinbase has been operating in “a shady crypto ecosystem outside the law for over ten years.” They asserted that the company’s whole business model is based on a lie: that it does not sell securities. According to them, Coinbase’s strategy seems to be hoping to get forgiven later rather than asking for permission upfront.
Notably, the legal action mirrors a previous case against Coinbase, which was initially dismissed but has since been partially revived by the U.S. Second Circuit Court of Appeals. The core issue at hand is whether the digital assets sold on Coinbase’s platform are, in fact, securities.
Coinbase has dismissed the allegations as “legally baseless” and expressed confidence in the judicial process to resolve the matter. However, this is not the company’s only legal challenge.
It is also in a high-profile battle with the U.S. SEC over whether its listed tokens are securities. Coinbase is currently appealing a judge’s recent decision that approved the case for trial. Legal experts anticipate that the SEC’s court case will determine whether digital assets are classified as securities rather than relying on class-action lawsuits.
Attorney John Jasnoch, known for his involvement in class-action litigation against various crypto entities, filed the new lawsuit. His previous cases have targeted projects like Safemoon and Ethereum Max, the latter of which resulted in a hefty fine for celebrity Kim Kardashian due to promotional activities.
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