More On: Bitcoin
XRP, dogecoin (DOGE), and shiba inu (SHIB) are among the 79 cryptocurrencies being traded on Coinbase that are not registered securities, according to a class-action lawsuit (SHIB).
A class-action lawsuit was filed last week against Coinbase Global Inc., Coinbase Inc., and CEO Brian Armstrong.
It is alleged that from Oct. 8, 2019, till the present, Coinbase has allowed customers to acquire and sell 79 distinct types of cryptocurrency without revealing that they are actually securities. Additionally, neither the Securities and Exchange Commission (SEC) nor any state regulators have registered these crypto securities, according to the plaintiffs, who also claim that Coinbase is not licensed as a securities exchange or broker-dealer.
According to the plaintiffs, Coinbase's sale of these coins "violates the laws of both federal and state jurisdiction." Anyone who used Coinbase or the Coinbase Pro platform to buy or sell any of the 79 crypto tokens during the class period is eligible for a refund of the class fee.
The plaintiffs alleged that they were unable to protect their interests because they failed to register their crypto assets with the SEC and state authorities:
Purchasers do not have access to the disclosures that accompany the issuances of traditional securities. Rather, investors receive — at most — only the so-called whitepapers, which describe the token, but do not satisfy the requirements for a prospectus under federal and state securities laws.
The 79 cryptocurrencies named in the lawsuit are 1INCH, AAVE, ACH, ADA, AGLD, ALGO, AMP, ANKR, ARPA, ATOM, AUCTION, AXS, BAL, BAND, BAT, BNT, BOND, BTRST, CGLD, CLV, COMP, CRO, CRV, CTSI, CVC, DNT, DOGE, DOT, ENJ, EOS, FARM, FET, FIL, FORTH, GNT, GRT, GTC, ICP, IOTX, KEEP, KNC, LINK, LOOM, LRC, MANA, MATIC, MKR, MLN, NKN, NMR, NU, OGN, OMG, ORN, OXT, PLA, POLY, QNT, QUICK, RARI, REN, REP, RLC, SHIB, SKL, SNX, SOL, STORJ, SUSHI, TRB, TRIBE, UMA, UNI, XLM, XRP, XTZ, XYO, YFI, ZRX.
The lawsuit makes many references to SEC Chairman Gary Gensler. The SEC chairman has stated on multiple occasions that there is insufficient investor protection in the cryptocurrency market. He further emphasized that certain platforms list 50 to 100 tokens, some of which are most likely securities.
The SEC, on the other hand, has not been actively clarifying which cryptocurrencies it deems securities. The Commission sued Ripple Labs and two executives in December 2000 over the sale of XRP, which it claimed was unregistered securities. Ripple continues to claim that XRP is not a securities; the litigation is currently pending.
According to the class-action complaint filing filed by Coinbase:
This case is a class action where the aggregate claims of all members of the proposed classes exceed $5,000,000, exclusive of interest and costs.
The plaintiffs seek to “recover damages, consideration paid for tokens, and trading fees, together with interest thereon, as well as attorneys’ fees and costs, to the fullest extent permitted by law.”
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