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The largest cryptocurrency market in the United States is facing a new round of legal challenges from a pair of lawsuits.
Coinbase faces two class-action lawsuits as the US Securities and Exchange Commission (SEC) scrutinizes the exchange for unregistered securities, as a former product manager pleads not guilty to insider trading in federal court.
In the first caselaw firm Bragar Eagel & Squire sued Coinbase Global in the United States District Court for the District of New Jersey on behalf of investors who purchased Nasdaq COIN stock between April 14, 2021 and July 26, 2022.
At issue are two instances where the security fell in price following the release of damaging news about Coinbase:
- A May 10 disclosure that in the event Coinbase files for bankruptcy, the digital assets of customers held on the company’s exchange “could be subject to bankruptcy proceedings, and these customers could be treated as our general unsecured creditors.” COIN went down 26.4%.
- A July 25 report that the US Securities and Exchange Commission (SEC) was investigating Coinbase over allegations that the exchange was selling unregistered securities on its market. COIN stock lost over 21% in value the next day.
You can find more information about the Bragar Eagel & Squire complaint here.
The second category of action treatment against Coinbase Global and certain of its officers was also filed in the United States District Court for the District of New Jersey by Pomerantz LLP.
The company “seeks to recover damages caused by the defendants’ violations of the federal securities laws and to pursue remedies [applicable under] the Securities Exchange Act of 1934.”
The Pomerantz lawsuit includes almost verbatim allegations against Coinbase regarding the bankruptcy terms and the SEC’s ongoing investigation.
“The complaint alleges that throughout the class period, the defendants made materially false and misleading statements about the Company’s business, operations and compliance policies.
…the above conduct exposed the Company to an increased risk of regulatory and governmental scrutiny and enforcement.
…the Company’s public statements were materially false and misleading at all relevant times.”
Details of the case will be added to Pomerantz soon Website.
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Featured Image: Shutterstock/Voger Design
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