Coinbase faces lawsuit over alleged unregistered securities sales
Coinbase argues that a legal ruling in its favour could clear regulatory uncertainty in crypto markets.
A United States federal judge has ruled that Coinbase must face a lawsuit from customers accusing the cryptocurrency exchange of illegally selling securities without registering as a broker-dealer. The judge rejected Coinbase’s argument that it did not qualify as a seller under federal securities law, citing claims that customers traded directly with the company rather than with third parties. Allegations under state laws in California, Florida, and New Jersey will also proceed.
The lawsuit, initially dismissed in 2023, was partially revived by an appeals court last year. Customers are seeking unspecified damages, while Coinbase maintains that it does not list or sell securities on its platform. The company remains confident it will prevail in court. Meanwhile, the U6S Securities and Exchange Commission (SEC) has also sued Coinbase, arguing that the exchange allowed trading of unregistered securities.
Coinbase has appealed a separate ruling that could clarify whether digital tokens qualify as investment contracts under US law. The company told the appeals court that a decision in its favour could remove regulatory uncertainty surrounding the cryptocurrency market. The outcome of these legal battles could have significant implications for the broader industry.
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