Investors Accuse Coinbase of Violating Securities Law

Reading Time: < 1 minute

Cryptocurrency exchange Coinbase is currently facing a lawsuit regarding its alleged violation of securities laws.

According to Reuters, the lawsuit accuses Coinbase of selling securities without proper registration as a securities broker, and the request for dismissal made by the company has been denied by a US court.

This means that the lawsuit will proceed. The lawsuit was initially filed by individual investors who claimed that Coinbase was selling unregistered securities and causing financial harm to them.

Coinbase’s defense was that it is not a registered seller under federal securities laws, thus making it immune to legal action.

However, the court rejected this defense. In addition to this lawsuit, the US Securities and Exchange Commission (SEC) has also filed a separate one against Coinbase. The SEC’s claim is that Coinbase allowed the trading of tokens that should have been registered as securities, which is against the law.