Coinbase Lawsuit Heats Up as Court Rules It Must Face Investor Claims

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Dismissing coinbase coinbase – support@coinbase.com WalletCentralised Exchange ‘s attempt to quash an investor lawsuit in New York, a US federal court declined to accept the exchange’s argument that it is not a ‘statutory seller’ of securities. The US federal court ruling against the prominent cryptocurrency exchange has brought back the sensational question: are cryptocurrencies securities?   

Coinbase Deemed a ‘Seller’ in New York Lawsuit 

The rejection of Coinbase’s argument by Judge Paul Engelmayer means that the crypto exchange will have to face the lawsuit filed against it in New York by investors. 

The primary allegation in the lawsuit against the cryptocurrency exchange is that it sold at least 79 unregistered crypto securities. 

Dismissing all the arguments aimed at denying the exchange’s role as a direct seller, Judge Engelmayer noted that customers trade directly with the exchange. 

Coinbase Responds: “We Don’t Sell Securities”

Shortly after the federal court ruling, Coinbase released a written statement explaining their position in the debate. The exchange asserted that they do not list, offer or sell securities. However, they welcomed the judgment, saying, “Today’s opinion importantly narrowed the scope of discovery in this case.” Notably, they expressed confidence in their argument’s potential to prevail in court.

The SEC Lawsuit: A Separate Legal Battle 

It was in 2023 that Coinbase was dragged to court in connection with the alleged unregistered security sales. Unsurprisingly, the first to level a serious allegation against the crypto exchange was the US Securities and Exchange Commission. The regulator’s primary accusation was that the exchange operated an unregistered securities platform. 

Coinbase’s Argument: Crypto Trades are Asset Sales 

Coinbase strongly challenged the SEC’s legal action, presenting the argument that cryptocurrency trades on its platform are asset sales, not securities trades. It even approached a US appeals court, demanding that crypto trades on its platform should be considered as asset sales, not securities trades. 

The exchange even initiated legal actions against the SEC and Federal Deposit Insurance Corporation, alleging that the agencies failed to comply with the Freedom of Information Act.

Also Read :   US CFTC Hosts CEO Forum to Kickstart Crypto Pilot Program   ,

Coinbase Exchange: A Market Overview 

Coinbase is one of the most prominent centralised cryptocurrency exchanges. It has a highly impressive trust score of 10 out of 10. Its 24-hour trading volume stands at $4,600,949,539. In the last 24 hours, it has seen a change of 17.3%. The exchange supports 272 coins and 420 trading pairs. BTC/USD, with a 24 hour volume of $1,108,040,694, is the most active trading pair on the exchange.