One of the largest cryptocurrency exchanges in the industry. Coinbase, won the lawsuit brought by a group of clients alleging that the platform facilitated the sale of unregistered securities and lacked the necessary licenses to operate as a broker-dealer. Coinbase successfully dismissed the class action lawsuit.
The clients behind the lawsuit, which was filed in New York federal court in October 2021, sought damages stemming from the sale or solicitation of approximately 79 digital assets by Coinbase. The plaintiffs alleged that the sale constituted illegal contracts because the platform did not carry out the necessary registration procedures with the US regulator, Securities and Exchange CommissionAnd pointed out Reuters.
US District Judge Paul Engelmayer In Manhattan, customers who used the services of the Coinbase and Coinbase Pro trading platforms ruled that they could not prove the platform’s ownership of the 79 crypto assets. The plaintiffs said that unlike platforms that match buyers and sellers, the exchange acted as a “middleman,” making it the “de facto seller” of digital assets.
Customers have also alleged that this setup allows Coinbase to collect transaction fees, while circumventing disclosure rules designed to protect investors’ interests in the case of traditional securities.
Engelmayer rejected the clients’ claims, saying the platform had no direct role in the transactions, though it allegedly promoted digital assets by promoting a “value proposition” and participating in trades.
The judge wrote that these exchange activities, including marketing efforts and necessary materials and services, were deemed insufficient to identify the defendants as sellers.
The platform has been around for a long time Refusal Allegations that it was listing securities after the SEC launched an investigation into the listing of digital assets that it said should have been registered as securities.
in blog postAnd Paul Grewal, Coinbase’s chief legal officer, said none of the assets listed on the exchange can be classified as a security. Additionally, the process by which Coinbase decides whether or not a digital asset is a security has been reviewed by the US regulator itself, he said.
Meanwhile, competitor exchange clients binance He appealed after another New York judge dismissed a similar lawsuit on March 20, 2022.
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