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<p class="is-style-lead">A New Jersey court judge deemed a lawsuit against Coinbase over its portrayal of an eventual regulatory crackdown acceptable.</p>
<p>Late on Sept. 5, U.S. District Judge Brian Martinotti <a href="https://www.reuters.com/legal/coinbase-must-face-shareholder-lawsuit-over-sec-risks-2024-09-06/?taid=66db169f0ab9a30001ffc5f3&amp;utm_campaign=trueAnthem:+Trending+Content&amp;utm_medium=trueAnthem&amp;utm_source=twitter" target="_blank" rel="noopener noreferrer nofollow">ruled</a> that Coinbase shareholders had the right to sue the crypto exchange for its misleading stance on the Securities and Exchange Commission’s launch of a civil complaint.</p>
<p>The class action lawsuit, directed by Swedish pension fund Sjunde AP-Fonden, alleged that Coinbase, its CEO Brian Armstrong, and other company executives failed to fairly represent the likelihood of an SEC enforcement action.</p>
<p>Judge Martinotti also ruled that shareholders had grounds to scrutinize the firm’s risk disclosures in the event of a bankruptcy filing.</p>
<p>The ruling was issued shortly before Coinbase stock posted an eight-day loss streak. A crypto.news market analyst <a rel="noopener noreferrer nofollow" href="https://crypto.news/coinbase-stock-forms-risky-patterns-as-crypto-outlook-darkens/">noted</a> that COIN shares formed a “risky pattern” amid weak crypto price performance.</p>
<p>You might also like: <a rel="noopener noreferrer nofollow" href="https://crypto.news/coinbase-analysts-doubt-rate-cuts-will-drive-market-movement/"> Coinbase analysts doubt rate cuts will drive market movement </a></p>
<h2 class="wp-block-heading" id="coinbase-juggles-legal-conundrums">Coinbase juggles legal conundrums</h2>
<p>Martinotti’s disapproval of Coinbase’s motion to dismiss marked another partial loss tied to the firm’s ongoing tussle with the SEC. In March, a federal judge in New York rejected the firm’s appeal to dismiss an SEC civil lawsuit from June 2023.</p>
<p>However, the firm has also made progress in court. According to Coinbase CLO Paul Grewal, Judge Katherine Polk Failla ordered the SEC to share information needed for the exchange’s defense. A court also <a rel="noopener noreferrer nofollow" href="https://crypto.news/court-coinbase-wallet-broker/">rejected</a> the SEC’s claim that Coinbase Wallet was an unregistered broker-dealer.</p>
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   <p lang="en" dir="ltr">Today Judge Failla ruled from the bench on our motion to compel <a href="https://twitter.com/SECGov?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">@SECGov</a> to provide key information for the defense of our case. In short, the Court ordered the SEC to produce important discovery. I’ll share the full transcript when we have it, so you can read it for yourself. In…</p>— paulgrewal.eth (@iampaulgrewal) <a href="https://twitter.com/iampaulgrewal/status/1831811779531289080?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">September 5, 2024</a>
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<p>Meanwhile, the company has been active in lobbying throughout the U.S. election, whether through direct donations to super PACs like Fairshake or facilitating crypto fundraisers for candidates. Grewal also told Bloomberg that a pro-crypto Congress was all but certain, regardless of the outcome of the November presidential elections.</p>
<p>Read more: <a rel="noopener noreferrer nofollow" href="https://crypto.news/a-pro-crypto-congress-is-coming-coinbase-clo/"> A ‘pro-crypto’ congress is coming: Coinbase CLO </a></p>

Coinbase shareholder lawsuit against exchange to proceed

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