Coinbase Scrutiny Ratcheting Up As the Leading US Crypto Exchange Is Hit With Two New Lawsuits
The largest cryptocurrency marketplace in the United States is facing a new round of legal challenges from a pair of lawsuits.
Coinbase is being slapped with two class action lawsuits on the heels of the U.S. Securities and Exchange Commission (SEC) scrutinizing the exchange over unregistered securities as a former product manager pleads not guilty to insider trading in a 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.
At issue are two instances where the security dropped in price after news detrimental to Coinbase came out:
- A May 10th disclosure that in the case of Coinbase declaring bankruptcy, customers’ digital assets held on the company’s exchange “could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors.” COIN proceeded to fall by 26.4%.
- A July 25th report that the U.S. Securities and Exchange Commission (SEC) was investigating Coinbase over allegations that the exchange was selling unregistered securities on its marketplace. 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 the Global United States District Court for the District of New Jersey by Pomerantz LLP.
The firm is “seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies [applicable under] the Securities Exchange Act of 1934.”
The Pomerantz suit includes almost verbatim allegations against Coinbase regarding its bankruptcy terms and ongoing SEC investigation.
“The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies.
…the foregoing conduct subjected the Company to a heightened risk of regulatory and governmental scrutiny and enforcement action.
…the Company’s public statements were materially false and misleading at all relevant times.”
Case details will soon be added to the Pomerantz website.
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Author: Daily Hodl Staff