Coinbase, the largest cryptocurrency exchange in the United States, appears to be entangled in legal battles on a regular basis. This time, the cryptocurrency exchange has been accused of passing off securities as cryptocurrencies.
Christopher Underwood, Christopher Underwood, and Henry Rodriguez, three Coinbase users, launched a class-action complaint against the company for more than 79 crypto assets listed on the platform. According to the lawsuit, the claimants accuse Coinbase of selling assets that they regard to be securities, which is illegal.
Dogecoin (DOGE), Polkadot (DOT), Ripple (XRP), Solana (SOL), Chainlink (LINK), and other cryptocurrencies which are included in the list.
According to the case filed in New York’s district court, people who purchased any of the assets should receive a total of $5 million in compensation for their losses.
The plaintiffs claimed that Coinbase should have registered with the Securities and Exchange Commission as a national securities exchange. However, this will impose a number of reporting and regulatory requirements similar to those imposed on stock exchanges.
Furthermore, the SEC has been delaying the implementation of a standardised regulatory framework for crypto assets. Their classification has also been a source of contention, with regulators currently dragging their heels on this matter. This has caused market misunderstanding about what should and should not be recognised as securities in the market.
The action also addressed SEC Chair Gary Gensler’s recent remarks before the Senate Banking Committee, in which he stated that Coinbase is not registered with the SEC.
Based on prior comparable actions filed against crypto firms, the latest suit is highly unlikely to pass the initial filing or go to trial. However, it is another example of how misunderstanding about the classification of crypto assets is growing, and many people are uneasy about the industry’s lack of solid regulation.
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