Coinbase faces more legal battles as two law firms file lawsuits against the company amid an ongoing investigation by the SEC.
On August 4, two New York-based law firms Bragger Eagle & Squire When Pomerantz LLP has filed a class action lawsuit against Coinbase Global in the United States District Court in New Jersey.
The lawsuit alleges that Coinbase misled the public about its information. Business practices and compliance policies related to claims against client assets in the event of bankruptcy and issues of trading in unregistered securities.
The companies have filed a lawsuit on behalf of all parties that acquired Coinbase shares between April 14, 2021 and July 26, 2022, seeking damages caused by Coinbase’s allegedly misleading statements. asked for the recovery of
The case against coinbase
Specifically, Coinbase allegedly provided false or incomplete information regarding matters related to the custody of client assets and securities trading.
The law firm, citing information from Coinbase, Quarterly report For the first quarter of 2022, we argue that the exchange did not properly notify customers of any eventual claims on their assets in the event of bankruptcy. Coinbase said in a report:
“Crypto assets in custody may be considered property of the bankruptcy estate, so in the event of a bankruptcy, crypto assets held on behalf of a customer are subject to bankruptcy proceedings, and such customer may: may be treated by our general unsecured creditors.”
Following the launch, Coinbase CEO Brian Armstrong tweeted:
“We should have updated our retail terms sooner and were not proactively contacted when this risk disclosure was added.
As a result, Coinbase Class A common stock dropped 26.4% and closed at $53.72 per share on May 11, 2022, resulting in more losses for investors.
The lawsuit against Coinbase also included an ongoing investigation by the SEC. The SEC is investigating whether Americans were improperly allowed to trade unregistered securities on exchanges.
SEC Continues to Investigate Coinbase
Coinbase is under investigation by the SEC over allegations of posting unregistered securities on its platform. The SEC has launched an investigation following an insider trading lawsuit against former Coinbase employee Ishan Wahi.
According to the SEC, 9 of the 25 crypto assets Ishan has traded on exchanges are securities. However, Coinbase refutes claims that it does not list its securities. Coinbase Chief Legal Officer Paul Grewal wrote: blog post State:
“Coinbase does not list securities on its platform.
