On Thursday, Coinbase shares rose after a federal security judge disbanded a class-action suit against the cryptocurrency exchange in a rare crypto legal triumph.
Shares drove higher overnight and were up nearly 24% by Thursday.
The litigant claimed Coinbase owned the crypto assets that it later directly sold to end users, and that Coinbase’s possession meant it “held title” over those tokens.
Although in a 27-page opinion by Paul Engelmayer, the U.S. District Judge noted conflicting claims from the litigant and pointed to Coinbase’s user agreement, which said users were not buying or selling any digital currency from the exchange and that “at all times” the title to a user’s currency persisted with the user.
Further, the judge disbanded the federal claims with detriment, meaning the litigant cannot refile the same case again and again. Adducing the dismissal of another crypto class-action against Binance, Engelmayer also mentioned that the class-action complaints had failed to establish Coinbase’s status as an “immediate seller” or as a champion.
“The litigants had also asserted that Coinbase’s marketing exhibited an effort to ask for a sale of securities,” Engelmayer disbanded that argument.
Initially, the class-action suit was filed in October 2021 and incriminated Coinbase CEO Brian Armstrong as the primary “control person” at the exchange. Later, the company declines to comment on the ruling.
Gary Gesler, Chairperson at the Securities and Exchange Commission, aggressively chases actions in the crypto space by arguing they represent securities offerings in the cryptocurrency industry.
In the beginning of this year, Gensler proclaimed a joint enforcement action against crypto exchange Gemini and the now-bankrupt crypto provider Genesis Trading. At the same time, Gensler also stated that those charges made it “clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws.”
- Published By Team Genuine Reporter