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Coinbase is facing another lawsuit, what is the exchange accused of this time? – Crypto News Current

Leading American cryptocurrency exchange Coinbase has been hit by another lawsuit. This time, a group of investors claimed that the company made false and misleading statements, causing its share price (COIN) to fall sharply between April 14, 2021 and July 2022 (collection period).

Coinbase went public on April 14, 2021 through a direct listing on Nasdaq. The company’s stock started traded around $400 but closed the first day of trading at $328. Since then, COIN has been on a downward spiral and is currently trading at $88.90, down 74% from its All-time high (ATH) is equivalent to.

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Coinbase is facing a class action lawsuit

The class action lawsuit, filed in U.S. District Court for the District of New Jersey, alleges that Coinbase has made “materially false and misleading statements regarding the company’s business, operational, and compliance policies” since its IPO.

According to Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, long-time shareholders and investors who suffered a loss during the “collection period” can join the lawsuit at no cost or obligation.

investment tip Coinbase is facing another lawsuit, what is the exchange accused of this time?  – Crypto News Current, Crypto Trading News

The Class Action Notice highlighted two key events that negatively impacted the price of COIN. The first was the company’s controversial risk disclosure, while the second was the SEC investigation.

Coinbase Risk Disclosure Request

On May 10, 2022, Coinbase released its first-quarter earnings report, revealing that it lost $430 million between January and April. While the numbers came in worse than expected, a risk disclosure in the earnings report caused an uproar among the exchange’s customers.

According to the disclosure filing with the United States Securities and Exchange Commission (SEC), Coinbase customers could lose access to crypto assets stored on the exchange if the company ever files for bankruptcy, like other crypto firms that have gone bankrupt in recent months are.

This is because Coinbase users could be treated as “general unsecured creditors” so they would be the last to file claims. Subsequent to disclosure, the company’s CEO, Brian Armstrong, apologized to customers, noting that the disclosure was something the exchange should have done sooner. Nonetheless, on the day, COIN plunged 26.4% to an all-time low (ATL).

SEC is investigating Coinbase over securities offering

Following May’s controversy, Coinbase hit another major snag last month when the SEC began investigating whether the exchange was offering unregistered securities to U.S. investors.

The investigation was launched after a former Coinbase product manager was accused of an insider trading scheme that raked in $1.5 million in profit. Although the staff recently pleaded not guilty, the regulator claimed that nine of the tokens involved in the insider trading scheme were unregistered securities.

The news of the SEC investigation by Coinbase stock and COIN fell 21% to $52.93.

A sea of ​​complaints

Meanwhile, this isn’t the first lawsuit against Coinbase this month. Yesterday, reports It turned out that the exchange was asking the US Supreme Court to arbitrate two lawsuits filed by its customers.

One of the indictments is seeking compensation for $31,000 lost on Coinbase. The other alleges that the exchange violated California consumer laws by allegedly selling $1.2 million Dogecoin (DOGE) from a “raffle” event. Both cases are reportedly seeking class-action status.

Other lawsuits and class action lawsuits have also been filed against the company, including one related to the collapsed Terra Classic tokens.

Source: Crypto News Deutsch

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