A shareholder of Coinbase brought the stock market to court, claiming that the investors misled about bankruptcy risks and risky commercial practices.
According to February 18 court case Deposited in a federal court in New Jersey, claimant Wenduo Guo claims that Coinbase has not announced that customer assets can be considered part of its bankruptcy, as a result of which retail users may be left behind as unsecured creditors.
The plaintiff argues that although Coinbase has positioned itself as a trusted preservator, the critical risks stayed in connection with digital assets. The suit pointed to the collapse of more than 75 crypto exchanges before Coinbase became public in 2021, leaving customers without their funds behind.
Despite repeated guarantees of business leadership, the lawsuit argues that Coinbase did not offer greater protection against such risks.
In addition to worrying about bankruptcy, the Coinbase trial accuses the execution of its own trade – the use of business funds to act – without making this well known to investors. Guo claims that this was a desperate attempt to prevent falling crypto prices, which exposed the company to further financial instability.
Furthermore, the complaint claims that Coinbase top managers, including Coinbase CEO Brian Armstrong, benefited from Insider knowledge, who sold millions in stock, while they are aware of the company’s vulnerabilities.
Other managers mentioned in the complaint are co-founder Fred Ehrsam, CFO Alesia Haas, COO Emilie Choi, Chief Legal Officer Paul Grewal and Chief Accounting Officer Jennifer Jones. Various board members, including Fred Wilson, Mark Andreessen, Kelly Kramer, Gokul Rajaram and Tobias Lütke, are also mentioned, together with former board member Kathryn Haun.
The lawsuit also connects the problems of Coinbase to the SECs 2023 right case against the company, which claimed that it has not stated not -registered securities and was operated without the correct approval of the regulations.
Guo argues that these increasing legal and regulatory pressure, in combination with non -known internal risks, have led to considerable losses for the company’s shareholders. The lawsuit is looking for compensation and reforms of administration to prevent future misconduct and has demanded a process of the jury.
Coinbase has not issued an official statement from the moment of the press. Crypto.news handed out to comment but has not heard anything yet.
Coinbase’s legal misery
Apart from the last lawsuit, Coinbase is currently fighting a Class Action in New York on alleged violations of effects. Earlier this month, an American judge ruled that Coinbase should make a lawsuit of customers who accuse the exchange of illegally selling effects. The case, originally rejected in 2023, was partially revived last year by a Court of Appeal, as a result of which important accusations could continue.
The New York case is not the only securities -related Coinbase lawsuit that is confronted with. In May 2024, customers from California and Florida complained the exchange and CEO Brian Armstrong for similar allegations, in which tokens such as Solana, Polygon, Near Protocol, Decentraland and Algorand are identified as non -registered effects.
The battle of Coinbase with the SEC, which has been sweating for almost two years, could quickly see a turning point. In a February 14 submitThe SEC asked for 28 days to revise the profession of Coinbase and noted that the newly established Crypto task force could play a role in terminating the legal dispute.
Despite legal problems, the stock market reported stronger than expected Q4 income in 2024, with its turnover that increased 138% compared to 2023.
