According to a filing made on Wednesday, U.S. District Judge Paul Engelmayer has dismissed a planned class action lawsuit brought by clients who say Coinbase offered them unregistered securities and failed to register as a broker-dealer.
The planned class-action lawsuit was filed in federal court in New York in October 2021. It will seek damages resulting from the sale or solicitation of 79 digital assets that the customers claim amounted to unlawful contracts since the platform is not registered with the US Securities and Exchange Commission.
After determining that the plaintiff’s claims stated in their amended complaint filed last March incorporated additional assertions that clearly contradicted their first Complaint, the judge presiding over the case in New York took the decision to throw out the lawsuit and dismiss the plaintiff’s claims.
According to him, if the lawsuit had been permitted to continue, the issue of whether or not the assets in question constitute securities would have been the primary point of contention.
Engelmayer went on to say that the assertions made in the complaint are clearly contradicted by the provisions of Coinbase’s user agreement, which show that the business does not own title to the digital assets that are purchased and traded on the exchange. In addition, the court came to the conclusion that the platform did not aggressively seek for investment opportunities.
Coinbase is now engaged in a number of class action litigation, which it continues to defend itself against. In August 2022, a class action lawsuit was brought against the company in the Northern District Court of Georgia. The complaint claims that the exchange did not do enough to secure its customers’ wallets and locked consumers out of their accounts during times of extreme market volatility.
