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Coinbase Unauthorized Securities Exchange Class Action Lawsuit Overview:
- Who: Christopher Underwood, Louis Oberlander and Henry Rodriguez filed a class action lawsuit against Coinbase Global, Inc. and its CEO Brian Armstrong.
- Why: Underwood, Oberlander and Rodriguez claim Coinbase is operating as an unauthorized securities exchange.
- Where: The class action lawsuit was filed in New York federal court.
The popular cryptocurrency trading platform Coinbase is operating as an unauthorized securities exchange, a new class action lawsuit alleges.
Plaintiffs Christopher Underwood, Louis Oberlander and Henry Rodriguez claim in an amended complaint that Coinbase has 79 digital assets available for trading on the platform that should be classified as securities.
The plaintiffs, who also named Coinbase CEO Brian Armstrong as a defendant, claim crypto tokens available for trade on Coinbase are, in reality, securities that the company is not authorized to sell.
Further, the cryptocurrency buyers argue Coinbase is in violation of state and federal securities laws by doing so.
“Coinbase is selling these securities despite the fact that there is no registration statement in effect for these securities and despite the fact that Coinbase has refused to register either as a securities exchange or as a broker-dealer,” the class action lawsuit states.
Coinbase Crypto Tokens Qualify As ‘Investment Contracts,’ Plaintiffs Say
Underwood, Oberlander and Rodriguez argue the 79 crypto tokens in the class action lawsuit meet the legal criteria to be considered securities and qualify as “investment contracts” since the token holders only “hope to profit from the managerial efforts of those running the issuer.”
“The tokens issued in these (initial coin offerings) are therefore investment contracts and securities because they represent the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others,” the class action lawsuit states.
The cryptocurrency buyers claim new crypto tokens are generally revealed with an initial coin offering that, at most, provides documentation about what the assets are. However, the buyers say these documents “do not satisfy the requirements for a prospectus under federal and state securities laws.”
Underwood, Oberlander and Rodriguez claim Coinbase is in violation of the Securities Exchange Act of 1934 and individual state acts from California, New Jersey and Florida, including the California Securities Act. They want to represent a nationwide class and California, Florida and New Jersey subclass of Coinbase users who have traded tokens on the platform since Oct. 8, 2019.
Plaintiffs are demanding a jury trial and requesting declaratory and injunctive relief and appropriate damages to themselves and all class members.
Last month, former US olympian Apolo Ono was able to get out of a class action lawsuit alleging the retired speed skater founded a cryptocurrency company that sold fraudulent tokens.
Have you used Coinbase to trade cryptocurrency tokens? Let us know in the comments!
The plaintiffs are represented by Jordan A. Goldstein and Mitchell Nobel of Selendy Gay Elsberg PLLC and Steven L. Bloch and Ian W. Sloss of Silver Golub & Teitell LLP.
The Coinbase Unauthorized Securities Exchange Class Action Lawsuit is Underwood, et al. v. Coinbase Global, Inc., et al., Case No. 1:21-cv-08353, in the U.S. District Court for the Southern District of New York.
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59 thoughts onCoinbase Class Action Claims Crypto Platform Operates As Unauthorized Securities Exchange
They took from me and made it difficult to get in my account. Please help
They froze my account
Add me please
Same claims others have made in particular to misleading practices in getting to lock into ETH 2. Have sense read a term that my interpretation was that they can keep my money and there is nothing I can do about it. I locked in early on thinking based upon information that Coinbase provided the update would have occurred long ago. On top of the delay preventing use of my funds they have continued to drastically drop the interest which was the key reason for staking as such. In addition Coinbase support told me to delete the wallet app and redownload it which locked me out of the wallet. They have in no way taken responsibility for their role in that occuring and deny any ability to do anything or refuse to do anything.
They charged me 13 cent for a coin that never hit 13 cent, now refuses to transfer my money back to my bank after trying to cash out . Took my money from my bank instantly but won’t put it back instead they took it upon themselves to put it in US DOLLAR and told me I had to wait for whatever reason. The it stalled for at least a minute and said preview sell ,by that time I lost another 4-5 dollars. I’m not a whale nor a rich coin pumper. I need my money when I cash out just as quick as they took it!!
Add me please!
If Bernard Madoff wasn’t dead . I would say coin base is the next worse thing ! Why are they getting away with this ?
They have restricted my account and I can’t access it . help portal is a merry go round of usefulness . please.add me.to the class.action suit . mark Palmer
Uselessness !
I would like to join the lawsuit. I had over 50K hacked and coinbase refused to look into it. The have frozen my account numerous times. I paid for coinbase one to get extra support and it’s useless.
Please add me
Coinbase Wallet is fraudulent in its practices and the methods they use to disclose how the wallet works when in recovery. They do this with impunity and many many people like myself have been locked out of a wallet and have no access to ANYTHING. This has to stop and coinbase must be held accountable