Key Takeaways:
- A cryptocurrency company filed a patent lawsuit against Coinbase Global Inc. related to its digital trading technology.
- A $ 350 million lawsuit alleges that numerous Coinbase services violate a blockchain patent.
Coinbase Global Inc, a cryptocurrency exchange, is facing patent litigation linked to its digital trading technology, initiated by a crypto business whose digital token issuance resulted in a settlement with US securities regulators in 2019.
Veritaseum Capital LLC filed the case in Delaware federal court on Thursday, claiming Coinbase infringed on a patent granted to Veritaseum creator Reggie Middleton by the United States Patent and Trademark Workplace in December.
Veritaseum’s digital token offering resulted in a 2019 settlement with US securities regulators. The VERI token is its coin. The complaint was filed in federal court in Delaware.
According Reuters, it argues that Coinbase violated a patent granted to Veritaseum founder Reggie Middleton by the US Patent and Trademark Office last December.
Veritaseum Capital claimed that numerous Coinbase services, including its blockchain architecture for transaction validation, violated the patent. It requested at least $350 million in damages from the court.
The lawsuit also claims that Coinbase features, including its website, mobile app, and Coinbase Cloud, Pay, and Wallet services, violate a patent for a “safe system for processing digital-currency transactions.”
Carl Brundidge of Brundidge Stanger, Veritaseum Capital’s legal counsel, stated on Friday that Coinbase was “uncooperative” when they attempted to settle out of court.
Token VERI was previously distributed by Veritaseum. In order to resolve allegations of a “fraudulent scheme” to sell the token in 2017 and 2018, Middleton and two of his Veritaseum firms paid the US Securities and Exchange Commission more than $ 9.4 million in 2019—including a $ 1 million fine against Middleton himself.
The SEC had accused them, among other things, of lying to investors about the tokens’ demand and manipulating their price. They accepted the payment without contesting or disputing the initial accusations.
This month has been full of highs and lows for Coinbase. On the one hand, the exchange received regulatory approval from the Dutch central bank, De Nederlandsche Bank, to operate in the country, while on the other, Nikhil Wahi, brother of ex-Coinbase product manager Ishan Wahi, pleaded guilty to a wire fraud conspiracy charge in what US prosecutors called the first insider trading case incorporating cryptocurrency.
