Coinbase Faces Legal Storm Over Crypto Securities Classification
1min read Coinbase, a leading cryptocurrency exchange, faces a significant legal challenge as a U.S. federal court in New York has ruled that it must confront investor claims. The court rejected Coinbase's argument that it is not a 'tatutory seller' of securities, reigniting the debate over whether cryptocurrencies should be classified as such.
The lawsuit, filed by investors in New York, alleges that Coinbase sold at least 79 unregistered crypto securities. Judge Paul Engelmayer dismissed Coinbase's attempts to avoid the lawsuit, noting that customers trade directly with the exchange. This ruling means Coinbase will have to face the lawsuit's claims.
In response to the court's decision, Coinbase released a statement asserting that it does not list, offer, or sell securities. However, the exchange welcomed the judgment, stating that it narrowed the scope of discovery in the case. Coinbase expressed confidence in its argument's potential to prevail in court.
This legal battle is not the first time Coinbase has faced regulatory scrutiny. In 2023, the U.S. Securities and Exchange Commission (SEC) accused the exchange of operating an unregistered securities platform. Coinbase challenged the SEC's legal action, arguing that cryptocurrency trades on its platform are asset sales, not securities trades. The exchange even approached a U.S. appeals court, demanding that crypto trades on its platform be considered as asset sales, not securities trades.
Coinbase, one of the most prominent centralized cryptocurrency exchanges, boasts an impressive trust score of 10 out of 10. Its 24-hour trading volume stands at $4,600,949,539, with a change of 17.3% in the last 24 hours. The exchange supports 272 coins and 420 trading pairs, with BTC/USD being the most active trading pair, having a 24-hour volume of $1,108,040,694.
