Coinbase Lawsuit Picks Up Steam With Investors Invited To File A Lead Plantiff Motion Against the Crypto Exchange

Investors who purchased shares of cryptocurrency exchange Coinbase Global Inc COIN have been informed of the deadline for submitting a lead plaintiff motion in a securities class action lawsuit against the company.

This reminder comes amid Coinbase's ongoing legal tussles.

The deadline is intended for investors who bought Coinbase securities between April 14, 2021 and July 26, 2022, according to a press release issued by the investor-rights law firm Bernstein Liebhard on Aug. 31. The deadline to file is Oct. 3, 2022. 

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Lawsuit Against Coinbase

The Securities Exchange Act of 1934 has allegedly been violated by Coinbase, according to this class action lawsuit filed in the U.S. District Court for the District of New Jersey.

Coinbase is accused of making false and deceptive claims about its operations, business practices and compliance standards.

One of the factors in dispute is Coinbase's possession of clients' cryptocurrencies, which could be the subject of bankruptcy proceedings. Coinbase customers would be regarded in this situation as the exchange's unsecured creditors.

Crypto lender Celsius declared bankruptcy while holding onto consumer funds, so this is not an unusual precept.

Rising Legal Issues with Coinbase

Coinbase is also under fire for allowing users to trade in assets that, according to SEC regulations, ought to be registered as securities. The SEC is already looking into whether the exchange inappropriately allows U.S. investors to trade digital assets that ought to have been registered as securities.

The complaint claimed that as a result, Coinbase's actions increased the danger of regulatory and governmental scrutiny for the business.

As the number of lawsuits against the exchange focused on Coinbase's business practices has increased over time, allegations of insider trading have also shaken the corporation.

Notably, Ishan Wahi, the former global product manager for Coinbase, has now denied two charges of conspiring to commit wire fraud.