The largest cryptocurrency market in the United States is facing a new round of legal challenges over a pair of lawsuits.
Coinbase is being slapped with two class action lawsuits on the heels of the US Securities and Exchange Commission (SEC) scrutinizing the exchange over unregistered securities as a former product manager pleads not guilty to abuse insider trading in federal court.
In the first case, law firm Bragar Eagel & Squire is suing Coinbase Global in the United States District Court for the District of New Jersey on behalf of investors who purchased Nasdaq COIN shares between April 14 2021 and July 26, 2022.
In question are two instances in which the security dropped in price after damaging news broke for Coinbase:
- A May 10 disclosure that, in the event Coinbase files for bankruptcy, customer digital assets held on the company’s exchange “may be subject to bankruptcy proceedings and such customers may be treated as our creditors general unsecured”. COIN proceeded to fall 26.4%.
- A July 25 report that the US Securities and Exchange Commission (SEC) was investigating Coinbase over allegations that the exchange was selling unregistered securities on its market. COIN shares lost more than 21% in value the following day.
More information about the Bragar Eagel & Squire complaint can be found here.
The second class action lawsuit against Coinbase Global and some of its officers was also filed in the United States Global District Court for the District of New Jersey by Pomerantz LLP.
The firm is “seeking to recover damages caused by Defendants’ violations of federal securities laws and to pursue remedies.” [applicable under] the Stock Exchange Act of 1934.”
Pomerantz’s lawsuit includes near-verbatim accusations against Coinbase regarding its bankruptcy terms and the ongoing SEC investigation.
“The lawsuit alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies.
…the foregoing conduct subjected the Company to increased risk of regulatory and governmental scrutiny and action.
…the Company’s public statements were materially false and misleading at all relevant times.”
Details of the case will soon be added to the Pomerantz website.
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