CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • DeFi & NFT
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • DeFi & NFT News
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$24,239.00
  • ethereum
    ETH$1,913.14
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    • Opinions
    CryptoPotato
    CryptoPotato
    • Crypto News
    • Margin Trading
    • Guides
      • Bitcoin & Crypto Guides 101
      • Bitcoin For Beginners
      • Editorials
    • DeFi & NFT
    • Buy
    • Language
    • Crypto News
    • Bitcoin For Beginners
    • Cryptocurrency Guides 101
    • Editorials
    • Bitcoin & Crypto Margin Trading
    • DeFi & NFT News
    • Bitcoin Price Analysis
    • CryptoPotato Crypto Fund
    • Ethereum (ETH) Price Analysis
    • Ripple (XRP) Price Analysis
    • Market Updates
    • Interviews
    • Buy Bitcoin with Card
    Home » Crypto News » Coinbase Faces Another Lawsuit, What Is the Exchange Accused of This Time?

    Coinbase Faces Another Lawsuit, What Is the Exchange Accused of This Time?

    Author: Mandy Williams

    Last Updated Aug 5, 2022 @ 13:21

    The class action seeks to recover damages incurred by investors who purchased Coinbase stock. 

    Leading American cryptocurrency exchange Coinbase has been hit with another lawsuit. This time, a group of investors claimed that the company made false and misleading statements, which caused its stock price (COIN) to plummet heavily between April 14, 2021, and July 2022 (Class Period).

    Coinbase went public on April 14, 2021, through a direct listing on Nasdaq. The company’s stock started trading around $400 but closed the first trading day at $328. Since then, COIN has been on a downward spiral and is currently trading at $88.90, a 74% decline from its all-time high (ATH).

    Coinbase Faces Class Action

    The class action filed in the United States District Court for the District of New Jersey claimed that Coinbase “made materially false and misleading statements regarding the Company’s business, operations, and compliance policies” since it went public.

    According to Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, long-term stockholders and investors who suffered a loss during the “Class Period” can join the suit with no cost or obligation.

    The class action announcement highlighted two major events that negatively impacted COIN’s price. The first was the company’s controversial risk disclosure, while the second was the SEC probe.

    ADVERTISEMENT

    Coinbase’s Risk Disclosure Filing

    On May 10, 2022, Coinbase released its Q1 earnings report, revealing that it lost $430 million between January and April. While the numbers were worse than expected, a risk disclosure in the earnings report caused an uproar among the exchange’s customers.

    According to the disclosure filing with the United States Securities and Exchange Commission (SEC), Coinbase customers might lose access to crypto assets stored on the exchange if the company ever files for bankruptcy like other crypto firms that have gone bankrupt over the past few months.

    This is because Coinbase users could be treated as “general unsecured creditors,” so they would be the last to make claims. Following the disclosure, the firm’s CEO Brian Armstrong apologized to customers, noting that the disclosure was something the exchange should have done earlier. Nonetheless, COIN plummeted 26.4% to an all-time low (ATL) on that day.

    SEC Probes Coinbase Over Securities Offering

    After the May controversy, Coinbase hit another major snag last month when the SEC began investigating whether the exchange offered unregistered securities to U.S. investors.

    The probe was launched after a former Coinbase product manager was accused of an insider trading scheme that netted $1.5 million in profits. Although the employee recently pleaded not guilty, the regulator claimed that nine of the tokens involved in the insider trading scheme were unregistered securities.

    The news of the SEC investigations after Coinbase stock and COIN plunged 21% to $52.93.

    A Sea of Lawsuits

    Meanwhile, this is not the first court case against Coinbase this month. Yesterday, reports emerged that the exchange asked the U.S. Supreme Court to send two lawsuits filed by its customers to arbitration.

    One of the suits wants compensation for $31,000 lost on Coinbase. The other claims that the exchange violated California consumer law by allegedly holding $1.2 million Dogecoin (DOGE) from a “sweepstakes” event. According to reports, both cases are seeking class-action status.

    Other lawsuits and class actions have also been filed against the company, including one relating to the collapsed Terra Classic tokens.

    SPECIAL OFFER (Sponsored)
    Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

    PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

    You Might Also Like:

    • Coinbase
      Coinbase Refutes Allegations of Selling Sensitive User Data to US Government Agencies
    • Not_Guilty
      Ex-Coinbase Executive Pleads Not Guilty to Insider Trading Case: Report
    • Coinbase_Logo
      Coinbase Is the First Cryptocurrency Company to Enter the Fortune 500 List
    Tags: Coinbase United States
    Enjoy reading? Share with your friends
    Facebook Twitter LinkedIn Telegram

    About The Author

    Mandy Williams
    More posts by this author

    Mandy Williams is a full-time reporter at CryptoPotato. She joined the cryptocurrency space in early 2017 during her search for financial freedom and has remained devoted to the industry.
    Contact Mandy: Twitter

  • bitcoin
    BTC$24,239.00
  • ethereum
    ETH$1,913.14
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    Editorials
    Binance BNB Burn Explained: How Much is Burnt and When?

    Binance BNB Burn Explained: How Much is Burnt and When?

    Will New Tokens be Airdropped to ETH Holders After Ethereum’s Hard Fork?

    Will New Tokens be Airdropped to ETH Holders After Ethereum’s Hard Fork?

    Cardano’s Vasil Hard Fork Explained: What to Expect from the Major Upgrade?

    Cardano’s Vasil Hard Fork Explained: What to Expect from the Major Upgrade?

    Users in Web3 Will Do a lot More Than Just Trade Crypto: Cronos’ Ken Timsit (Interview)

    Users in Web3 Will Do a lot More Than Just Trade Crypto: Cronos’ Ken Timsit (Interview)

    Institutions Are Starting to Buy Back: Interview with Nansen

    Institutions Are Starting to Buy Back: Interview with Nansen

    Top 5 Most Common Scams Related to Ethereum 2.0

    Top 5 Most Common Scams Related to Ethereum 2.0

    What is the Merge? What You Need to Know About the Transition to Ethereum 2.0

    What is the Merge? What You Need to Know About the Transition to Ethereum 2.0

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    Footer Logo
    About
    Advertise on CryptoPotato
    About Us | Contact Us | Careers

    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Cannabis Stocks News | Market Analysis
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!