A New York judge has dealt a blow to Coinbase, refusing to dismiss a class-action lawsuit against the cryptocurrency exchange. The suit alleges Coinbase illegally sold unregistered securities.
Judge’s Ruling
Judge Paul Engelmayer of the Southern District of New York rejected Coinbase’s argument that it shouldn’t be held responsible. Coinbase claimed it wasn’t a “statutory seller” because it didn’t technically transfer ownership of the 79 crypto assets involved. However, the judge countered that Coinbase customers only interact directly with the exchange itself, making Coinbase the seller. The judge also refused to dismiss claims related to California, New Jersey, and Florida law.
Coinbase’s Response
Coinbase maintains its innocence, stating that it doesn’t list, offer, or sell securities. They plan to fight the remaining claims in court.
Background and Ongoing Legal Battles
This isn’t Coinbase’s only legal headache. In February 2023, a similar lawsuit was dismissed, but an appeals court reversed that decision, sending parts of the case back to the judge. Furthermore, the SEC sued Coinbase in June 2023 for alleged securities law violations and operating as an unlicensed broker-dealer. Coinbase, in turn, countersued the SEC and the FDIC, accusing them of trying to destroy the crypto industry.
