Cryptocurrency exchange Coinbase and its CEO, Brian Armstrong, face a new class action lawsuit accusing investors of being duped into buying securities and claiming the company's business model is illegal .
The lawsuit , filed in the Northern District Court of California, on behalf of plaintiffs Gerardo Aceves, Thomas Fan, Edwin Martinez, Tiffany Smoot, Edouard Cordi and Brett Maggard from California and Florida, alleges that the sale of digital assets of Coinbase violated state securities laws since the company's founding.
The lawsuit claims that the Token of Solana ( SOL), Polygon ( Matic), NEAR Protocol ( NEAR ), Decentraland ( MANA ), Algorand (ALGO ), Uniswap (UNI ), Tezos ( XTZ) and Stellar Lumens ( XLM) are stock.
The plaintiffs claim that Coinbase recognized it as a “Securities Broker” in its user agreement, causing digital asset securities to be sold by the exchange as investment contracts or other securities. They also claim Coinbase Prime is a stock broker.
Coinbase has argued that the sale of secondary Cryptoasset does not meet securities trading criteria and disputed the relevance of securities regulations.
This new lawsuit is separate from Coinbase's highly publicized legal battle with the US Securities and Exchange Commission, which also questioned whether Token sold on Coinbase should be classified as securities. The exchange filed an interim appeal after the judge allowed the SEC's lawsuit to proceed.
