There has been a long debate in the court on whether XRP is a security or not. As per the SEC, it is—which resulted in a lawsuit that has dragged on for quite a while. And now Coinbase gets sued as it falls prey to the same argument. Recently, a class-action lawsuit was filed against the company for apparently selling unregistered crypto securities, which includes XRP, Dogecoin, SHIB, and more. There are a total of 79 of them.
Coinbase gets sued
The problem with this lawsuit is it hasn’t been filed by the SEC or any government authority. These are users who have made the case against Coinbase. Christopher Underwood, Louis Oberlander, and Henry Rodriguez claim that Coinbase has been allowing customers to buy and trade 79 unregistered crypto securities since October 8, 2019. They say that the exchange hasn’t even disclosed that the crypto’s are securities.
None of the cryptocurrencies are registered with the US SEC or any regulators, and we all know that Coinbase is not a securities platform. So, the sales of these on their platform violate the laws. However, the problem here is the fact that SEC never cleared the basis on which they claim particular crypto to be a security and the other one to be not.
The lead plaintiffs also said that the purchasers also do not have access to proper information and disclosures. All they get is a whitepaper which doesn’t satisfy the requirement of the state and federal laws.
What seems to be the aim of the lawsuit?
Even though the plaintiffs might be correct on Coinbase allowing unregistered securities on their platform, the SEC’s responsibility is to intervene and clarify the entire subject. Even after the long-drawn-out XRP case, they haven’t done so, which is again less than ideal. As per the demands of the plaintiffs, it seems that the goal is to extract money from the exchnages. They are claiming $5 million in claims exclusive of interest and the costs. These include trading fees, manages, and cost of attorneys. It might be difficult for Coinbase to win this, but they are not really at fault here, based on my opinion.
What are your thoughts as Coinbase gets sued due to the securities argument? And do you think they will win the case? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Robert Kiyosaki talks about crypto and the end of the US Dollar.