Coinbase finds itself entangled in yet another legal battle as customers initiate a class-action lawsuit against two of its subsidiaries, Coinbase Global and Coinbase Asset Management. The lawsuit, filed on Friday, accuses the exchange of repeatedly violating securities laws since its inception.
Central to the lawsuit are allegations of contradictions within Coinbase’s user agreement. While some cryptocurrencies are identified as securities, the lawsuit claims that Coinbase failed to register them for sale. Moreover, the lawsuit asserts that Coinbase openly acknowledges its role as a “securities broker” and “securities intermediary.”
Specific digital assets listed on Coinbase, including Algorand, Decentraland, Polygon, Near Protocol, Uniswap, and Solana, are cited as “digital asset securities” in the lawsuit.
The lawsuit contends that Coinbase, aware of the regulatory implications of classifying digital assets as securities, chose not to register them as required by state law. It alleges that Coinbase’s failure to disclose crucial information contributed to deceptive marketing tactics, aimed at pressuring customers into purchasing digital asset securities.
A spokesperson for Coinbase labeled the claims in the lawsuit as “legally baseless” and expressed confidence in addressing them through the judicial process.
Coinbase is already grappling with a separate lawsuit filed by the SEC, accusing the exchange of violating securities laws through its staking program. While Coinbase asserts that secondary sales of crypto assets do not constitute securities, it has challenged a judge’s decision allowing the SEC lawsuit to proceed. Notably, the SEC lawsuit did not target any Coinbase executives.