A user has filed a class action lawsuit against the crypto exchange Coinbase on behalf of account and wallet holders “whose accounts have been hacked and who have suffered losses due to the unauthorized transfer of assets”.
In an August 15 document to a U.S. court in Georgia, plaintiff George Kattula requested a jury trial against Coinbase. He claimed that the crypto exchange did not take any measures to secure users’ accounts, and it “unreasonably and unreasonably” locked customers out of their accounts during periods of maximum volatility in the crypto market. In addition, Kattula claims that Coinbase should be registered as a broker or dealer in the United States, since the platform handles the transfer of securities. In this case, these are cryptocurrencies.
“Coinbase does not indicate that the crypto assets on its platform are securities,” according to the lawsuit. “In fact, Coinbase brazenly flouts laws by telling the exchange that it does not need a registration statement for these securities, and by refusing to register as a securities exchange or as a broker-dealer.”
The document goes on to say:
“Crypto assets are similar to traditional securities in that they represent an investment in a project to be carried out with the funds through the sale of the crypto (be it a “token”, a “stablecoin” or a cryptocurrency). Investors buy cryptocurrencies in the hope that the value of the cryptocurrencies will increase if the issuer creates a benefit that adds value to the cryptocurrency.”
Coinbase has failed several times in times of extreme volatility in the crypto market. This has led some users to take legal action. In March 2022, a class action lawsuit was filed in New York stating that the crypto exchange operates as an unregistered securities exchange listing 79 different cryptocurrencies as securities that fall under the supervision of the US Securities and Exchange Commission (SEC).
In this context: Court allows class action against crypto trading platform Robinhood
SEC Chairman Gary Gensler has stated several times that the “most” offers of token projects would fall under the authority’s supervision as securities and should be registered accordingly. In July, the SEC announced that it would sue a former Coinbase product manager, his brother and an employee for insider trading, as at least nine of the 25 cryptocurrencies the trio is alleged to have used were securities.
In an interview with Cointelegraph, former director of U.S. consumer protection Kathy Kraninger said that regulatory clarity in the crypto space could depend on precedents. The legal team of a former OpenSea employee, who is also accused of insider trading, claimed in a document on Friday that prosecutors had filed charges only to set a precedent to prove that non-fungible tokens are securities.