Coinbase Faces Two New Lawsuits


Litigation regarding the sale of shares

Shareholders of major US cryptocurrency exchange Coinbase filed a lawsuit against the exchange on the 1st. Coinbase board members allege they sold shares in anticipation of a drop in the company’s stock price. Coinbase also faced a lawsuit over customer data on the same day.

The lawsuit was filed in a Delaware state court by one of Coinbase’s shareholders, Adam Grabski. He faces Coinbase Chairman and CEO Brian Armstrong, as well as several other board members, including Marc Andreessen.

The complaint alleges that when Coinbase went public on the Nasdaq in 2021, the defendants sold more than ¥396 billion ($2.9 billion) in shares of the company within days of listing. After that, within five weeks, the value of these stocks fell by more than ¥136 billion ($1 billion), he said.

Defendants also argued that they were aware of the need for capital injections and the potential for less revenue from trading fees for retail investors, and that they should have expected the stock price to fall.

Plaintiffs further allege that Coinbase, which had a direct listing on the Nasdaq, could have taken the form of an initial public offering (IPO).

In the case of IPOs, many companies impose trading restrictions on the grounds that directors possess non-public inside information. However, Coinbase claims that because it did not take the form of an IPO, directors and officers were able to buy and sell.

A spokesperson for Coinbase, meanwhile, commented that as the only major publicly traded exchange in the United States, it is often the target of “frivolous lawsuits,” and this lawsuit is one of them. .

What is an IPO

An abbreviation for IPO (Initial Public Offering), a new listing on the securities market to raise funds through the issuance of shares.

▶Cryptocurrency Glossary

Litigation concerning customer biometric information

Coinbase also faced a separate lawsuit on the same day.

According to a complaint filed in California District Court, the plaintiffs are suing Coinbase for improperly collecting biometric information from its customers.

Coinbase said it collected biometric data, such as fingerprints and facial photographs, through its Know Your Customer (KYC) process, which was not done properly.

Plaintiffs argue that under Illinois’ Biometric Information Privacy Act (BIPA), companies seeking to collect biometric data must notify individuals in writing that such data will be collected, and for what purpose and for how long the data will be stored. Pointed out that it must be notified by

Written consent from the customer is also required, and companies must also publicly disclose schedules and guidelines for future destruction of biometric information. Coinbase alleges that it did not enforce these BIPA procedures.

Coinbase also claims that it collects biometric data to further strengthen the platform on which its app is based, and that it is “unfairly profited” by doing so. It also went on to say that it has disclosed customer biometric information to several third-party companies, including Jumio Corporation.

Plans to fight the SEC in court

Coinbase is also poised to fight the U.S. Securities and Exchange Commission (SEC) in court.

In March, the SEC sent out a public letter, a “Wells Notice,” announcing that it planned to take legal action against Coinbase. The bureau has been investigating Coinbase for possible handling of unregistered securities.

On April 27th, Coinbase released a counter-argument to the SEC. He reiterated that the securities were not listed and criticized the SEC for its arbitrary crackdown without clear guidelines.

connection: US Coinbase publishes objection to SEC over unregistered securities issue

The post Coinbase Faces Two New Lawsuits appeared first on Our Bitcoin News.


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