Well Named ? Digging a little through the Journal du Coin archives, yours truly came across an old article from June 2018, covering the 115 Coinbase customer complaints filed with the SEC. The reasons given then ranged from extremely slow transactions, to the difficulty or impossibility of contacting the cryptocurrency exchange. Coinbase has grown since then, the cryptosphere has seen major developments, but some customers of the exchange still want to bring it to its knees by taking it to court. Three of them evoke this time an original reason that will probably appeal to SEC employees who have a hard tooth against cryptocurrencies and players in the sector.
Christopher Underwood, Louis Oberlander, and Henry Rodriguez filed a lawsuit in the Southern District of New York court on March 11, 2022 against Coinbase Global, Coinbase, and exchange CEO Brian Armstrong. The three plaintiffs purchased cryptocurrency through the exchange.
Interested parties are represented by the law firm Silver Golub & Teitell from Connecticut. They blame Coinbase for sell 79 tokens which would be securities under the Howey test (see SEC case law). The cryptocurrency exchange would thus violate federal and state laws on the sale of securities. Coinbase did not warn buyers of the risks associated with purchasing these cryptocurrencies.
The plaintiffs also state that Coinbase is the “real seller” of cryptocurrencies, during an exchange. The stock exchange credits and debits the accounts of the parties concerned, it would not be a simple facilitator of direct exchange between the people involved in a transaction.
For Philip Moustakis, lawyer at Seward & Kissel“ this case is not really a surprise “, the DRY having reported ” that it intended to carry out investigations or actions against crypto-exchanges “. However, the agency has not taken action to date on the charges brought by the three complainants.
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The SEC already too busy with the Ripple lawsuit
The Commission instead went after Ripple (XRP) by taking the company to court over the sale of unregistered securities, but it appears to be in bad shape right now and may regret engaging in this legal tussle. outcome of the trial.
Is this complaint likely to shake Coinbase? This type of legal action is part of the daily life of the stock market, which is therefore accustomed to managing it. The SEC could, however, take advantage of this to mess with Coinbase. She is already investigating Binance US suspected of collusion with market makers, and could take a liking to crossing swords with a major cryptocurrency exchange.
Right now, it’s shooting live ammunition on some exchanges and regulators are no longer joking. All the more reason to choose a platform that does not suffer this wrath, like FTX. Don’t wait any longer, register on this reference platform, and benefit from a lifetime reduction on your trading fees (affiliate link, see conditions on site).