Coinbase Hit With Lawsuit From Shareholder Alleging 2021 Stock Listing Was Based On Misinformation
Top US-based crypto exchange Coinbase is getting hit with a lawsuit alleging that the firm’s 2021 stock listing was based on misleading information.
According to a recent court filing, a shareholder of Coinbase is suing executives from the crypto exchange for allegedly misleading investors into purchasing shares that were “materially different and substantially riskier” than what was disclosed to them.
The plaintiff says that in the months leading up to Coinbase’s initial listing on the stock market, the company generated a massive influx of new users using ad campaigns, which caused the platform’s trading volume to spike, causing a breakdown in its operations and a disruption in its historical growth cycle.
The shareholder says that because of this, the company damaged itself as well as those who invested in it.
“[The] defendants’ efforts to increase Coinbase’s numbers in advance of the Direct Listing backfired, leaving the Company and its newfound investors damaged and vulnerable to the competition.”
According to the complaint, the Defendants misrepresented Coinbase to investors in their Registration Statement right before they sold over $700 million worth of Coinbase stock.
“This misrepresented to investors that the fundamentals behind Coinbase’s historical success were still in place and functioning as normal. Under this misrepresentation, Defendants listed nearly 115 million shares of its Class A common stock on the Nasdaq Global Select Market…
Due to Defendants’ promotional campaign and the damaged state of Coinbase’s ‘platform’ and ‘flywheel’ growth strategy, Plaintiff and other public investors in Coinbase who purchased shares in the Direct Listing unknowingly made an investment that was materially different and substantially riskier than what had been represented in the Registration Statement.”
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: StableDiffusion
The post Coinbase Hit With Lawsuit From Shareholder Alleging 2021 Stock Listing Was Based On Misinformation appeared first on The Daily Hodl.
Go to Source
Author: Daily Hodl Staff
