Coinbase has been hit with a class action lawsuit that alleges that the exchange giant wrongfully sold at least 79 different cryptocurrencies as unregistered securities.
The three plaintiffs, Christopher Underwood, Louis Oberlander and Henry Rodriguez, allege that Coinbase has been knowingly selling securities without registration statements under the guise of operating a cryptocurrency exchange.
The plaintiffs’ lawsuit says,
“But what Coinbase has not disclosed is that the Tokens are in fact securities, and Coinbase is selling these securities despite the fact that there is no registration statement in effect for these securities and despite the fact that Coinbase has refused to register either as a securities exchange or as a broker-dealer. Because Coinbase’s sale of these tokens violates both federal and state law, Plaintiffs, individually and on behalf of all persons or entities who transacted in the Tokens on the Coinbase Platform…”
Because the crypto assets on Coinbase are, according to the plaintiffs, “unregistered securities,” purchasers don’t have access to disclosures that usually come with issuances of traditional stock offerings.
“Rather, investors receive—at most—only the so-called whitepapers, which describe the token, but do not satisfy the requirements for a prospectus under federal and state securities laws.”
The three plaintiffs are each from different states in the US, and are each crypto investors and Coinbase users, as confirmed in the suit. Their affiliation with each other is unclear, as is their motivation for suing one of the largest companies of an industry they are apparently invested in, other than what is presented in their lawsuit.
The cryptocurrencies named in the suit as alleged unregistered securities are:
1INCH, AAVE, ACH, ADA, AGLD, ALGO, AMP, ANKR, ARPA, ATOM, AUCTION, AXS, BAL, BAND, BAT, BNT, BOND, BTRST, CGLD, CLV, COMP, CRO, CRV, CTSI, CVC, DNT, DOGE, DOT, ENJ, EOS, FARM, FET, FIL, FORTH, GNT, GRT, GTC, ICP, IOTX, KEEP, KNC, LINK, LOOM, LRC, MANA, MATIC, MKR, MLN, NKN, NMR, NU, OGN, OMG, ORN, OXT, PLA, POLY, QNT, QUICK, RARI, REN, REP, RLC, SHIB, SKL, SNX, SOL, STORJ, SUSHI, TRB, TRIBE, UMA, UNI, XLM, XRP, XTZ, XYO, YFI, ZRX.
The suit is reminiscent of the U.S Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs. Filed in December of 2020, the SEC alleged that Ripple also issued XRP as an unregistered security, which effectively took XRP out of the 2021 bull run.
Jay Clayton, who was chair of the SEC when it sued Ripple and is largely responsible for sparking talk of “unregistered securities” in crypto, was cited in the recent lawsuit against Coinbase.
“As former SEC chairman Jay Clayton has stated, ‘I believe every ICO I’ve seen is a security.’ Current SEC Chairman Gary Gensler has affirmed this view.”
Notably, Ethereum was not one of the 79 cryptocurrencies named in the lawsuit. In 2018, the SEC’s then Director of Corporation Finance William Hinman also made a speech stating that Ethereum was not a security, though his and the SEC’s reasoning behind that remains unclear.
The lawsuit takes specific stabs at multiple coins, including Cardano, which they claim issued ADA to investors who were buying with the implied expectation to make a profit from the work of Cardano developers, managers and promoters.
“Cardano’s website also claims that ‘[e]very ADA holder holds a stake in the Cardano network.’ A reasonable investor would interpret this language to mean that, by purchasing ADA tokens, the purchaser was investing in a common enterprise.”
The plaintiffs have a host of demands for relief, including up $5,000,000 in damages awarded to anyone who has purchased any of the assets alleged in the suit to be unregistered securities.
The post Coinbase Hit With Lawsuit Alleging Exchange Sold 79 Different Cryptocurrencies as Unregistered Securities appeared first on Coin Bureau.
- Coinsmart. Europe’s Best Bitcoin and Crypto Exchange.
- Platoblockchain. Web3 Metaverse Intelligence. Knowledge Amplified. FREE ACCESS.
- CryptoHawk. Altcoin Radar. Free Trial.
- Source: https://www.coinbureau.com/news/coinbase-hit-with-lawsuit-alleging-exchange-sold-79-different-cryptocurrencies-as-unregistered-securities/
- Bull Run
- Class Action
- class action lawsuit
- Cryptocurrency Exchange
- Jay Clayton
- Securities Laws
- What is