Coinbase, a major American cryptocurrency exchange, has been hit with another lawsuit. This time, the investor group alleges that the company made false and misleading statements, which resulted in the share price (COIN) falling between April 14, 2021 and July 2022 (class period). plunged sharply.
Coinbase went public on April 14, 2021 through a Nasdaq direct listing.Company stock started After trading around $400, it closed the first day at $328. Since then, COIN has been on a downward spiral and now he is trading at $88.90, a 74% drop from his all-time high (ATH).
Coinbase Faces Class Action Lawsuit
A class action lawsuit filed in the United States District Court for the District of New Jersey alleges that Coinbase has “made materially false and misleading statements regarding our business, operations and compliance policies” since going public. .
According to Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, long-term shareholders and investors who suffer losses during the “class period” can participate in litigation without cost or liability.
class action publication We highlighted two major events that negatively impacted the price of COIN: the first was the company’s controversial risk disclosure and the second was the SEC investigation.
Coinbase Risk Disclosure Application
On May 10, 2022, Coinbase released its first quarter earnings report, revealing that it lost $430 million between January and April. The numbers were worse than expected, but the risk disclosure in earnings reports caused an uproar among the exchange’s customers.
According to a disclosure document filed with the U.S. Securities and Exchange Commission (SEC), Coinbase customers will be held on the exchange if the company files for bankruptcy like other cryptocurrency companies that have gone bankrupt in the past few months. You may lose access to your virtual currency assets.
This is because Coinbase users may be treated as “general unsecured creditors”.Followed by DisclosureThe company’s CEO, Brian Armstrong, apologized to customers and pointed out that the disclosure should have been made by the exchange sooner. All-time low (ATL).
SEC investigates Coinbase over securities offering
After the May controversy, Coinbase faced another major problem last month when the SEC launched an investigation into whether the exchange was offering unregistered securities to U.S. investors.
The investigation was launched after Coinbase’s former product manager was accused of an insider trading scheme that made him $1.5 million in profits. A recent employee pleaded Despite their innocence, regulators claimed that nine of the tokens involved in insider trading schemes were unregistered securities.
News of SEC investigation after Coinbase stock and COIN rammed 21% to $52.93.
sea of lawsuits
Meanwhile, the lawsuit against Coinbase isn’t the first this month. yesterday, report It has become clear that the exchange has asked the U.S. Supreme Court to submit two lawsuits brought by customers to arbitration.
One lawsuit seeks compensation for $31,000 lost on Coinbase. Another alleges that the exchange violated California consumer law by allegedly holding $1.2 million in Dogecoin (DOGE) in a “sweepstakes” event. . Both cases are seeking class action status, according to reports.
Other lawsuits and class action lawsuits have also been filed against the company, including one related to the collapsed Terra Classic token.
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