Coinbase has been struck with two new lawsuits in the wake of an SEC investigation.
Coinbase is currently under heightened scrutiny from authorities, and the business is the subject of many lawsuits. The San Francisco-based bitcoin exchange, which is already under investigation by the US Securities and Exchange Commission (SEC), is now facing two new legal claims from two different law firms.
Bragar Eagel & Squire, a New York-based law firm, said on Thursday that it will sue Coinbase for making false representations about its business operations. Pomerantz LLP has also filed a lawsuit against the exchange, claiming damages for any losses caused as a consequence of the defendant’s breaches of federal securities laws. The plaintiffs brought this claim in order to be compensated.
Plaintiffs argue in both lawsuits that Coinbase made misleading and deceptive assertions about its business, operations, and compliance activities between April 14, 2021 and July 26, 2022. According to the charges, Coinbase failed to disclose that client bitcoin was held in escrow at Coinbase, so incorporating it into a bankruptcy estate subject to bankruptcy proceedings in which consumers would be considered as general unsecured creditors of the firm.
Furthermore, Coinbase is said to have neglected to reveal that it allowed US individuals to trade digital assets that, despite Coinbase’s awareness and complacency, needed SEC registration as securities. As a consequence of the above activities, the complaints contend that Coinbase’s public claims were always, to a large part, misleading and fraudulent.
Coinbase has already been engaged in a number of legal battles and contentious circumstances. The two new lawsuits come as the SEC investigates Coinbase for allegedly trading unregistered securities. In a related complaint, Ishan Wahi, a former global product manager for Coinbase, is accused of insider trading. Wahi, on the other hand, pleaded not guilty earlier this month in a Manhattan federal courtroom to two charges of wire fraud conspiracy.