Cryptocurrency exchange giant Coinbase is embroiled in legal turmoil as investors accuse the platform of shadowy conduct
A fresh class action lawsuit has been directed at cryptocurrency exchange behemoth Coinbase, alleging that investors have incurred significant losses due to what they perceive as dubious practices by the platform.
The plaintiffs argue that Coinbase has been operating in a murky realm within the crypto landscape, purportedly flouting state securities laws knowingly and persistently since its inception over a decade ago. Filed recently at the California Northern District Court's San Francisco Division, the complaint gained attention within the crypto community over the weekend. This legal action comes despite Coinbase's updated User Agreement on Feb. 6, explicitly stating its non-registration with the U.S. Securities and Exchange Commission (SEC) and its exclusion from offering securities services in the U.S. or to U.S. individuals.
According to the complaint, although Coinbase labels the crypto assets it sells as "securities" in its User Agreement, it has failed to register itself, its personnel, or the crypto securities it deals in. Consequently, the plaintiffs are seeking full rescission of contracts, statutory damages under state laws, and injunctive relief due to Coinbase's non-compliance.
Coinbase has not yet responded to queries from the International Business Times regarding the latest lawsuit. This legal entanglement follows a separate class action lawsuit filed in Georgia last month, which underscored various concerning incidents within the exchange, including instances of users being unable to access their accounts for prolonged periods, allegedly resulting in financial strain and frustration. Reports of hacked accounts and unauthorized transactions further exacerbated the situation.
In addition to these legal battles, Coinbase is grappling with a lawsuit brought forth by the SEC, accusing the exchange of breaching securities laws by operating as an unregistered broker and exchange for digital asset holders. Despite Coinbase's attempt to have the complaint dismissed, U.S. District Judge Katherine Polka Failla denied the motion in late March. Paul Grewal, the firm's chief legal officer, expressed readiness to delve deeper into the SEC's internal perspectives and discussions concerning crypto industry regulation.