- March 20, 2022
Coinbase is being sued for allegedly selling 79 unregistered crypto securities, including XRP, Dogecoin, and Shiba Inu.
A class-action lawsuit has been launched against Coinbase, a Nasdaq-listed cryptocurrency exchange, alleging that the platform allows consumers to trade 79 unregistered coins, including XRP, dogecoin (DOGE), and shiba inu (SHIB).
Claims in a Lawsuit Customers bought 79 unregistered crypto securities from Coinbase.
Last week, Coinbase Global Inc., Coinbase Inc., and CEO Brian Armstrong were named in a class-action complaint.
Christopher Underwood, Louis Oberlander, and Henry Rodriguez, lead plaintiffs and Coinbase users, claim that from October 8, 2019, to the present, Coinbase allowed clients to acquire and sell 79 different cryptocurrencies without disclosing that they were securities. These crypto securities are not registered with the US Securities and Exchange Commission (SEC) or any state regulators, according to the plaintiffs, and Coinbase is not licenced as a securities exchange or broker-dealer.
The plaintiffs claim that "The sale of these tokens by Coinbase is illegal under both federal and state law." During the class period, anyone who transacted any of the 79 crypto assets on Coinbase or the Coinbase Pro platform was covered.
Without registering these digital assets with the SEC and state regulators, the plaintiffs said:
Purchasers do not have access to the disclosures that traditionally accompany securities issuances. Rather, investors receive merely the so-called whitepapers, which describe the token but do not meet the federal and state securities laws' criteria for a prospectus.
The 79 cryptocurrencies named in the lawsuit 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.
SEC Chairman Gary Gensler is mentioned multiple times in the lawsuit. The SEC chairman has stated on multiple occasions that the crypto sector lacks adequate investor protection. He also pointed out that some platforms feature 50 to 100 tokens, with some of them possibly being securities.
The SEC, on the other hand, has been quiet about which cryptocurrencies it deems securities. The Commission sued Ripple Labs and two executives in December 2000 over the sale of XRP, which it claimed was unregistered securities. The litigation is still underway, but Ripple argues that XRP is not a security.
The following is taken from the class-action complaint filed by Coinbase:
This is a class action lawsuit in which the total claims of all members of the proposed classes exceed $5 million, excluding interest and fees.
The plaintiffs are seeking "to the fullest extent permitted by law, to recover damages, consideration paid for tokens, and trading fees, coupled with interest thereon, as well as attorneys' fees and costs."