Coinbase, the largest crypto exchange in the US, faces 2 new lawsuits after the SEC investigation began. The Securities and Exchnage Commission alleged that Coinbase had listed securities on their platform during the recent listing of 25 coins. However, they will now have to deal with two more lawsuits. It looks as if everyone is trying to bring down Coinbase.
Coinbase faces 2 new lawsuits
Bragar Eagel and Squire, a NY-based legal firm, reported that they are going to file a lawsuit against Coinbase because the company lied about its business practices. Then we have another company Pomerantz LLP filing a claim against Coinbase to be compensated for the losses due to Coinbase’s violations of the federal securities law.
Coinbase has been doing quite a few shady things, which have been highlighted in both of the lawsuits. Both of the plaintiffs said that Coinbase has been deceptive about its business, compliance, and operations. They hid from everyone that user crypto will be part of bankruptcy proceedings in case something happens. At the same time, they also failed to inform us that the crypto is being stored in escrow accounts.
This basically means when you buy crypto on Coinbase, it is no longer yours. And you cannot do anything about it even if you wanted to in case the company goes bankrupt. And we know that is a real possibility seeing how many firms have gone under in the last few months. Yes, Coinbase is larger and is much safer than those firms, but it is still a risk that the user should decide on their own after knowing the details.
Coinbase and the SEC
The SEC recently alleged that out of the 25 coins that they recently listed, 10 of them are securities. If this turns out to be true, Coinbase will be in deep waters. However, Coinbase is of the opinion that they are not securities, and they have followed all the necessary checks prescribed by the SEC before listing them. In fact, the SEC has also thoroughly investigated its listing process and gave it the go-ahead.
What are your thoughts as Coinbase faces 2 new lawsuits, and do you think they will win against the SEC? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Binance partners with Mastercard to bring crypto reward card to Argentina.