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Cryptocurrency Exchange Coinbase Is Being Sued Multiple Times

Cryptocurrency Exchange Coinbase Is Being Sued Multiple Times

Coinbase is under increased scrutiny from regulators and is being sued by multiple parties. The San Francisco-based cryptocurrency exchange is now being audited by the United States Securities and Exchange Commission (SEC). At the same time, the law firms have filed two extra-judicial suits against Coinbase.

Even More Regulatory Trouble for Coinbase

On Thursday, New York-based law firm Bragar Eagel & Squire announced plans to sue the cryptocurrency exchange for making deceptive statements about its business practices. Pomerantz LLP filed a second complaint against Coinbase, claiming the exchange broke federal securities laws and should pay damages to those who lost money as a result. The purpose of any litigation is to award damages to the aggrieved parties.

Both complaints assert that the company made false and misleading statements about its activities, compliance efforts, and operations between April 14 and July 26 of this year. The allegations allege that the cryptocurrency exchange concealed the fact that it held users’ cryptocurrency in escrow in preparation for bankruptcy proceedings, in which the consumers would have the status of unsecured creditors.

Coinbase’s Good Name Is in Jeopardy Due to an Increasing Number of Incidents

It has also been alleged that the exchange denied disclosing that it had let users located in the United States to engage in digital asset trading, despite the fact that doing so necessitated registration with the relevant securities authority in order to offer securities. The complaints claimed that Coinbase’s public statements were misleading.

Coinbase has been the target of other similar lawsuits in recent years. Coinciding with the filing of these two novel cases is an investigation against the crypto exchange by the United States’ securities commission into allegations that it facilitates the trading of unregistered securities.

Additionally, in a separate case, former Coinbase global product manager Ishan Wahi will be discussed on charges of insider trading. They had been convicted guilty of conspiring to commit wire fraud earlier this month.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.