Brett On ETH

United

Prime

Brett (SOL)

<a href="https://www.coinbase.com/en-gb/" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">Coinbase</a>, the prominent crypto exchange, along with its CEO Brian Armstrong, finds itself embroiled in a fresh class-action lawsuit, alleging deception of investors into purchasing securities and asserting the illegality of the company’s business model.
The lawsuit, filed in the United States District Court for the Northern District of California San Francisco Division, is brought forth by plaintiffs Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard from California and Florida. It alleges that Coinbase’s sales of digital assets knowingly contravened state securities laws from the company’s inception.
According to the lawsuit, tokens from Solana, Polygon, Near Protocol, Decentraland, Algorand, Uniswap, Tezos, and Stellar Lumens are deemed securities.
The plaintiffs argue that Coinbase, in its user agreement, acknowledges itself as a “Securities Broker,” thereby characterizing the digital asset securities it sells as investment contracts or other securities.
They further contend that Coinbase Prime brokerage functions as a securities broker.
In seeking resolution, the plaintiffs demand complete rescission, statutory damages pursuant to state law, and injunctive relief via a jury trial.
This legal action echoes a prior class-action suit alleging consumer detriment stemming from Coinbase’s sale of securities.
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Coinbase has countered these allegations, asserting that secondary crypto asset sales fail to meet securities transaction criteria and challenging the applicability of securities regulations.
This recent lawsuit diverges from Coinbase’s widely publicized legal clash with the U.S. Securities and Exchange Commission, which also scrutinizes whether tokens traded on Coinbase should be categorized as securities.
In response to a judge’s ruling permitting the case to proceed, Coinbase has lodged an interlocutory appeal.
In a filing dated April 26 in the U.S. District Court for the Southern District of New York, John Deaton, a crypto lawyer currently campaigning to unseat Senator Elizabeth Warren, submitted an amicus brief supporting a motion for interlocutory appeal on behalf of 4,701 Coinbase customers.
Despite legal challenges, Coinbase reported a robust resurgence in the first quarter of 2024, buoyed by market performance improvements and the rollout of spot Bitcoin exchange-traded funds.
Notably, the exchange recorded $1.6 billion in total revenue and $1.2 billion in net income for the first quarter, achieving $1 billion in adjusted earnings before interest, taxes, depreciation, and amortization.
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Coinbase Faces Class-Action Lawsuit Over Alleged Securities Deception

Crypto Intelligence

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