A newly filed class-action complaint alleges that Coinbase violated US securities laws.
The complaint, which was filed in the Northern District of California’s San Francisco division on Friday, claims that the top US crypto exchange has been operating as “part of a shadowy crypto ecosystem operating just outside of the law.”
“Its entire business model has been built upon a lie and a dream: the lie is that ‘we do not sell securities,’ and the dream is that, knowing it would eventually be caught in the lie, ‘it is better to ask for forgiveness than permission.’
Coinbase has knowingly, intentionally, and repeatedly violated state securities laws since it began doing business.”
The complainants accuse the exchange of offering numerous unregistered “digital asset securities,” including the layer-1 blockchain projects Solana (SOL), NEAR Protocol (NEAR), Algorand (ALGO), Stellar (XLM) and Tezos (XTZ); the blockchain scaling solution Polygon (MATIC); the decentralized exchange Uniswap (UNI); and the Ethereum (ETH)-based virtual reality platform Decentraland (MANA).
The U.S. Securities and Exchange Commission (SEC) has also accused Coinbase of violating securities laws, launching a lawsuit against the exchange in June 2023.
Coinbase has argued that trading digital assets doesn’t qualify as an “investment contract” under the Howey Test, an assessment created by the Supreme Court more than 90 years ago to determine whether assets should be classified as securities.
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