Coinbase Scrutiny Increases As The Leading US Crypto Exchange Is Hit By Two New Lawsuits
The largest cryptocurrency marketplace in the United States is facing another round of legal challenges from a pair of lawsuits.
Coinbase is being slapped with two class action lawsuits on the heels of the US Securities and Exchange Commission (SEC) investigating the exchange over unregistered securities, as a former chief product officer pleaded not guilty to insider trading in federal court.
In the first case, the law firm Bragar Eagel & Squire is suing Coinbase Global in the United States District Court for the District of New Jersey on behalf of investors who bought the Nasdaq stock COIN between April 14, 2021 and July 26, 2022.
These are two cases where the security fell in price after news that was harmful to Coinbase came out:
- A May 10 disclosure that in the event Coinbase declares bankruptcy, customers’ digital assets held on the company’s exchange “may be subject to bankruptcy proceedings and such customers may be treated as our general unsecured creditors.” COIN continued to fall by 26.4%.
- A July 25 report that the US Securities and Exchange Commission (SEC) was investigating Coinbase over allegations that the exchange was selling unregistered securities on its marketplace. The COIN stock lost over 21% in value the next day.
More information about the Bragar Eagel & Squire complaint can be found here.
The second class action lawsuit against Coinbase Global and some of its officers was also filed in Global United States District Court for the District of New Jersey by Pomerantz LLP.
The firm “seeks to recover damages caused by the defendants’ violations of the federal securities laws and to pursue remedies [applicable under] Securities Exchange Act of 1934.”
The Pomerantz lawsuit includes almost verbatim allegations against Coinbase regarding the bankruptcy terms and ongoing SEC investigation.
“The complaint alleges that during the class period, defendants made materially false and misleading statements regarding the company’s business, operations and compliance policies.
…the above conduct exposed the Company to an increased risk of regulatory and governmental scrutiny and enforcement action.
… the company’s public statements were materially false and misleading at all times.”
Case details will be added to the Pomerantz website soon.
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