Coinbase faced multiple criticisms but now, it’s facing a class-action lawsuit from supposed investors.
The SEC has been going hard against crypto companies with only a few fighting back. Coinbase is one of those companies going after the agency but recently, the company and its CEO Brian Armstrong faced a new class-action lawsuit alleging investor deception into purchasing securities.
Per the lawsuit, Coinbase admitted that it was a securities broker per its user agreement but offered “illegal securities,” which the following were classified as:
- SOL
- MATIC
- NEAR
- MANA
- ALGO
- UNI
- XTZ
- XLM
Coinbase recently beat its revenue expectations in Q1, reporting $1.64bn compared to the $1.34bn expected, with shares soaring roughly 30% in 2024 alone. It has recently also obtained a restricted dealer license in Canada, allowing it to expand despite US regulatory pressure.
The crypto exchange is one of the few also going after the agency and in mid-April, Coinbase filed an interlocutory appeal in its case against the SEC. The motion being appealed is the issue of whether the SEC has authority over digital asset transaction as investment contracts.
Coinbase has also won against a previous suite against the SEC wherein the agency claimed that it was an unregistered broker. The lawsuit been dismissed while the exchange’s staking program has been denied.
Paul Grewal, the Chief Legal Officer of Coinbase, recently emphasized that ETH is a commodity and not a security. This came as the SEC’s historical stance and rulings classified Ethereum as a commodity.
Coinbase is also challenging the SEC’s rejection of the ETH ETP applications. The exchange also looked for court action to prompt SEC into crypto rulemaking process, saying the agency violated laws and that they lacked explanation for its denial.
Before Coinbase won the case, analysts highlighted the importance of Coinbase winning against the SEC since it would determine whether the SEC had the authority to discern which assets were securities or not.
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