Judge Rules Coinbase Must Defend Against Shareholder Lawsuit Over Regulatory Risk
A federal judge found that Coinbase shareholders presented credible claims regarding the exchange's portrayal of the likelihood of an SEC lawsuit. However, the judge dismissed most of the other allegations in the lawsuit.
Coinbase
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Because Bitcoin
September 9, 2024
Coinbase
SEC
News
Last week, a U.S. judge partially denied Coinbase's request to dismiss a class action lawsuit from shareholders who accuse the exchange of misleading them about the risk of SEC legal action. The 2022 lawsuit claims Coinbase made false statements about its regulatory risk. U.S. District Judge Brian Martinotti ruled that while there is a plausible case that Coinbase acted "negligently" regarding the SEC’s eventual lawsuit, most allegations were not substantiated.
The court found the plaintiffs had sufficiently alleged that Coinbase misrepresented the likelihood of SEC enforcement by overstating the safety of its crypto assets.
Coinbase was sued by the SEC in June 2023 for alleged violations of federal securities laws. Coinbase's attempt to dismiss this lawsuit was largely unsuccessful, indicating the SEC's arguments have merit. The class action, initially filed in 2021 and updated in July 2023, saw Coinbase's motion to dismiss partially granted and partially denied. Only claims related to Proprietary Trading Statements and Bankruptcy Statements were dismissed, with other claims proceeding.
As per the CoinDesk report, a Coinbase spokesperson stated that while some claims were dismissed, the remaining ones are moving forward based on the plaintiffs’ allegations rather than actual facts. The company remains confident in its case and appreciates the court's careful review.
