The largest cryptocurrency marketplace in the United States is facing a fresh round of legal challenges from two lawsuits.
Coinbase has been hit with two class-action lawsuits on the heels of the US Securities and Exchange Commission (SEC) investigating exchanges over unregistered securities, while a former product executive pleads not guilty to insider trading in federal court.
In the first case, 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 Nasdaq stock COIN between April 14, 2021 and July 26, 2022.
We are talking about two instances when the security fell in price after news broke that adversely affects Coinbase:
- A May 10 disclosure that if Coinbase were to file for bankruptcy, customers’ digital assets held on the company’s exchange “could be the subject of bankruptcy proceedings and such customers could be treated as our general unsecured creditors.” COIN fell further by 26.4%.
- A July 25 report that the US Securities and Exchange Commission (SEC) is investigating Coinbase over allegations that the exchange is selling unregistered securities on its marketplace. COIN stock lost over 21% in value the next day.
More information on the Bragar Eagle & Squire complaint can be found here.
The second class action lawsuit against Coinbase Global and certain of its officers was also filed by Pomerantz LLP in the Global United States District Court for the District of New Jersey.
The Company is “seeking recovery and redress of damages caused by the defendants’ violations of the federal securities laws [applicable under] of the Securities Exchange Act of 1934.”
The Pomerantz lawsuit contains near-literal allegations against Coinbase regarding its bankruptcy terms and the ongoing SEC investigation.
“The Complaint alleges that the Defendants made materially false and misleading statements regarding the Company’s business, operations and compliance policies throughout the Class Period.
… the foregoing conduct exposed the Company to increased risk of regulatory and regulatory scrutiny and enforcement action.
… the Company’s public statements were materially false and misleading at all relevant times.”
Case details will be added to the Pomerantz website shortly.
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