Coinbase Faces Class Action Lawsuit Over SEC Suit
A federal judge has rejected Coinbase’s attempt to dismiss a class action lawsuit filed by shareholders. The lawsuit alleges that Coinbase misled investors about the likelihood of facing an SEC lawsuit.
Coinbase Accused of Downplaying SEC Risk
The judge ruled that the shareholders adequately alleged that Coinbase and its executives defrauded them by downplaying the potential of an SEC enforcement action. They claimed that Coinbase repeatedly emphasized that the crypto assets they listed were not securities. The judge’s decision comes 15 months after the SEC filed its civil lawsuit against Coinbase.
Shareholders Claim Coinbase Misrepresented Risks
The shareholders also claim that Coinbase misrepresented the risk that customers might lose assets stored with the company in the event of a bankruptcy. They point to a 26% drop in Coinbase’s share price after the company disclosed a larger-than-expected decline in quarterly revenue.
Coinbase Defends Its Actions
Coinbase has denied the allegations and stated that it is confident it will ultimately prevail in court. “We remain confident that we are right on the facts and the law, and we look forward to proving the rest of our case,” the company said in a statement.
Class Action Covers Shareholders from April 2021 to June 2023
The proposed class action covers Coinbase shareholders from April 14, 2021, to June 5, 2023. The case is currently in the U.S. District Court for the District of New Jersey.
This development underscores the ongoing legal uncertainty surrounding the cryptocurrency industry and the scrutiny that exchanges like Coinbase face.
