Coinbase is in hot water, facing a class-action lawsuit from customers who claim the exchange sold unregistered securities. This comes on top of an existing battle with the SEC.
A Judge Rules Against Coinbase
A Manhattan judge ruled that Coinbase must go to trial for allegedly operating as an unregistered broker, selling 79 tokens that customers consider securities. The judge rejected Coinbase’s argument that it wasn’t directly involved in the sales, emphasizing that customers transact directly with Coinbase itself. Interestingly, the judge initially dismissed the case, but an appeals court reversed that decision.
The SEC Lawsuit and a Potential Appeal
Coinbase is also fighting a bigger lawsuit from the SEC, accusing them of acting as an unregistered broker-dealer and illegally selling unregistered securities through its staking program. Coinbase is appealing this decision, hoping to challenge the SEC’s application of the Howey test to crypto assets. A win here could significantly impact the SEC’s case and other crypto-related lawsuits.
Coinbase: A Trillion-Dollar Potential?
Despite the legal battles, some believe Coinbase could become a trillion-dollar company. Matt Hougan, Bitwise CIO, suggests that the previous administration’s anti-crypto stance created a competitive advantage for Coinbase. Now, with a potentially more crypto-friendly regulatory environment, Coinbase is well-positioned to become a major player in the financial world, particularly if the crypto market continues to grow. The current total crypto market cap is around $3.09 trillion.
