tl;dr
A federal judge has ruled that Coinbase must face a class action lawsuit in New York, rejecting Coinbase's argument to dismiss the case. The lawsuit alleges that Coinbase illegally sold securities as digital assets without being registered as a broker-dealer. The judge stated that Coinbase's claim w...
A federal judge has ruled that Coinbase must face a class action lawsuit in New York for allegedly selling securities without being a registered broker-dealer. The judge rejected Coinbase's argument, stating that customers transact solely with Coinbase and that the claim of not being a "statutory seller" was invalid as Coinbase never passed title to the crypto assets traded by customers.
In February 2023, the lawsuit was dropped but some parts were returned by an appellate court for review. In June 2023, the SEC sued Coinbase for violating securities laws and operating as an unlicensed broker-dealer.
A year later, Coinbase filed a lawsuit against the SEC and FDIC, alleging intentional efforts to cripple the digital assets industry.
Reuters reported that Judge Paul Engelmayer rejected Coinbase's argument to dismiss the case, affirming that the firm illegally sold securities as digital assets without being registered as a broker-dealer. Despite the lawsuit being initially dropped in February 2023, an appellate court decided to return some parts of it to the judge for review.
Following the SEC's lawsuit against Coinbase in June 2023, the company retaliated by filing a lawsuit against the SEC and the FDIC, claiming deliberate actions to cripple the digital assets industry. Coinbase insisted that it does not list, offer, or sell securities on its exchange and looks forward to vindicating the remaining claims in the district court.