Coinbase is undergoing greater scrutiny by regulators, with the company becoming the target of multiple lawsuits. The San Francisco-based exchange, which is currently under investigation by the United States Securities and Exchanges Commission (SEC), is now facing two further legal requests from two law firms.
Last Thursday, the New York law firm Bragar Eagel & Squire revealed which allegedly sued Coinbase for misleading claims about its business practices. Also Pomerantz LLP presented a claim against the exchange, claiming that you are entitled to compensation for losses suffered as a result of violations of federal securities laws. This lawsuit was brought to compensate the plaintiffs.
In both complaints, Plaintiffs allege that Coinbase made fraudulent and misleading claims regarding the company’s business, operations and compliance efforts, between April 14, 2021 and July 26, 2022.
According to the complaints, Coinbase neglected to disclose that customers’ cryptocurrencies were being held on deposit with themselves, making them part of a bankruptcy mass of money, where customers would be treated as unsecured general creditors of the company.
Furthermore, Coinbase allegedly refused to disclose that it allowed US citizens to trade digital assets that – despite his awareness and complacency – required registration as securities with the SEC. The lawsuits therefore argue that Coinbase’s public statements have always been, to a significant extent, false and misleading.
The exchange has been involved in several court cases and controversial situations in the past. The two new causes come as the company is investigated by the SEC for alleged trading of unregistered securities. Ishan Wahi, former Coinbase global product manager, is accused of insider trading in a separate lawsuit. However, earlier this month, Wahi pleaded not guilty to two counts of computer fraud in a federal court in Manhattan.
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