Key Takeaways:
- 79 tokens of Coinbase have been alleged as illegal.
- Coinbase has papers stating the firm is the original seller.
Coinbase has been alleged to operate as an unregistered securities exchange. On March 11, this allegation was brought upon by three customers who proposed a class activity after purchasing cryptocurrency via the platform.
79 tokens have been enlisted in the lawsuit, which is against the laws laid down by the state. Buyers were not aware of the risks involved in the securities that Coinbase was selling.
The complaint was filed by Christopher Underwood, Louis Oberlander, and Henry Rodriguez, and Connecticut law firm Golub & Teitell represents them. It has been filed by the name Coinbase Global, and the defendant is CEO Brian Armstrong.
The counsel at Seward & Kissel, Philip Moustakis, said, “The case is not much surprised. After all, the SEC has signaled that it intends to pursue investigations or actions against crypto-exchanges.”
In addition, a 255-page document has been submitted that claims that the tokens are qualified as security as per the Howey test. It states, “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”
There is also proof stating that Coinbase performs as the actual seller during these transactions. It helps the parties involved in these to credit and debit instead of facilitating direct exchange.
