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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
My entire family’s USDT has been emptied all at the same time. Coinbase will do nothing to recover our funds. They keep suggesting that we have given our secured information out to strangers. How interesting that we all did this the same day at the same time. We need an attorney!!!
I had thousand of dollars in crypto stolen out of my coinbase account in which coinbase did not help or assist in addressing the issue.
Hello, I have used Coinbase for several years now and have been pushing back against customer service for contradicting, misleading, and complete removal of language regarding Eth2 Staked trading. They have taken funds hostage and will no longer comment on it’s plans to offer Trading of staked Ethereum before the Merge upgrade like other exchanges already do. I am curious about what further action can be brought against these frauds.
I had a couple thousand in coins stolen from me on Coinbase, along with $1000 that they took out of my bank account. I would love to get in on a lawsuit as Coinbase did nothing to help.
I have had $9k stolen from me on Coinbase. Then I magically had $22k show up. Have no idea how it got there or how to get it out. I want my money that was stolen from me. Coinbase in no help whatsoever.
How do I file and get a peace of this lawsuit pie
Not to trust customer service on Coinbase and Coinbase wallets
I had $7.5K in bitcoin stolen from my Coinbase account apparently by hackers. They then accessed my linked checking account and stole an additional $1K. Coinbase was impossible to communicate with and denies any responsibility. I have TFA and have no idea how these illegal transactions occurred. Coinbase alleges that it sent me a TFA email to authenticate the transactions. I never received such an email. Although my bank restored $1K from Coinbase, Coinbase locked my account and alleges I owe it $1K.
Same story.Coinbase locked me out of my account,when they did let me back in all of my bitcoins were stolen.I filed multiple complaints but they were always closed with no resolve.
My account has been frozen and I can’t get any answers or updates on my refund and account closure. ADD ME, I HAVE PROOF!