California Users Accuse Coinbase And CEO Of Fraud

Coinbase crypto exchange, a leading US exchanger. (Photo; Doc. Ciosae)

JAKARTA - The US-leading crypto exchange Coinbase and its CEO, Brian Armstrong, are facing a new lawsuit from a group of plaintiffs from California and Florida. The lawsuit accuses Coinbase of committing fraudulent practices by selling assets without registration to its users.

This is not the first time Coinbase has fallen into legal trouble. In mid-2023, the exchange also faced a lawsuit from the United States Securities and Exchange Commission (SEC) over similar issues.

The class action lawsuit was filed in the United States District Court for California's Northern District, San Francisco Division. The plaintiffs, including Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi, and Brett Maggard, accused Coinbase of committing several offenses.

First, the plaintiffs stated that Coinbase acknowledged in its use agreement that it was operating as a securities asset broker. This is reinforced by Coinbase Prime brokerage status as a securities broker.

Second, the lawsuit claims that Coinbase has sold crypto assets such as Solana (SOL), Polygon (MATIC), Near Protocol (NEAR), Decentraland (MANA), Algorand (ALGO), Uniswap (UNI), Tezos (XTZ), and Stellar Lumen (XLM) to its users. These assets are not listed as securities in the SEC, so their sales are considered illegal.

Based on these claims, the plaintiffs demanded several things, including:

This new lawsuit adds to the long list of legal battles facing Coinbase. Apart from lawsuits from the SEC, the exchange is also faced with various other legal issues, such as:

Despite facing various lawsuits, Coinbase also received support from several parties. John Deaton, a crypto lawyer, recently filed a legal opinion in favor of Coinbase in the SEC case.