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Coinbase was hit by another Class Action lawsuit while trying to win a break from the Supreme Court
New lawsuits have piled up against US crypto firm Coinbase soon after the securities regulator revealed an ongoing investigation.
As per Bragar Eagel & Squire, PC, a shareholder rights law firm, a new class action lawsuit has hit Coinbase Global Inc. in the United States District Court of New Jersey on behalf of holders who purchased or acquired Coinbase securities between April 14, 2021 and July 26, 2022.
Exchange accused of “false and misleading” statements
The company opened the call for investors until October 3, 2022, stating, “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 lawsuits came as Coinbase revealed that its customers would be treated as unsecured creditors in the event of bankruptcy in the platform’s Q1 2022 report. While shares fell in the next day’s open, Coinbase CEO, defendant Brian Armstrong, admitted it was a late disclosure soon after May.
Once again, Bloomberg’s report that the Securities and Exchange Commission (SEC) is looking into Coinbase to allow Americans to trade unregistered securities further weakened the price of the common stock in the next open market, burning the pockets of shareholders. Meanwhile, Pomerantz LLP has also filed a class-action lawsuit against Coinbase and some of its executives, according to a recent release.
New legal problems after SC approach
Notably, the new legal trouble comes a day after Coinbase Global asked the US Supreme Court to stay the lawsuit while it continues appeals to arbitrate the cases that were filed out of court. The platform also called for an urgent intervention in the filings, saying it would suffer “irreparable harm” if the lawsuits were allowed to continue.
The accumulation of legal trouble comes as Senator Cynthia Lummis’ office reportedly confirmed that Coinbase is among 40 platforms under investigation. While this is happening, Coinbase is on the verge of releasing its second quarter earnings after announcing a huge partnership with BlackRock. While the deal positively impacted COIN’s share price, regulators may continue to pull the plug on the Nasdaq listing.
On the back of a weak market, Zacks Equity Research predict that Coinbase will post a “year-over-year profit decline on lower revenue” for the quarter ending June 2022.
Zacks estimates that revenue will be close to $877.32 million, down 60.6% from the previous quarter. Since listing, Coinbase is down more than 60% with Ark Investment Management dumping over 1.41 million shares from three of its funds last week.
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