Regulators are now paying more attention to Coinbase (NASDAQ: COIN), and the business is now the subject of numerous lawsuits. The US Securities and Exchanges Commission (SEC), which is already looking into the San Francisco-based bitcoin exchange, is now facing two more legal complaints from two different law firms.
Coinbase is facing two lawsuits for deceiving investors
Bragar Eagel & Squire, a law firm based in New York, announced on Thursday that it would sue Coinbase for allegedly making misleading statements regarding its corporate practices. In a separate lawsuit brought against the crypto exchange, Pomerantz LLP asserts that it is owed damages for any losses sustained as a consequence of the plaintiff’s contraventions of federal securities regulations. The plaintiffs are seeking compensation in this litigation.
Plaintiffs contend in both lawsuits that between April 14 last year and July 26, 2022, Coinbase made false and misleading statements about its business, activities, and compliance activities. The allegations allege that Coinbase did not disclose that user cryptocurrency was held in escrow at the company, rendering it a matter of bankruptcy proceedings in which clients would’ve been considered ordinary unsecured creditors of the business.
Additionally, it was claimed that Coinbase would not reveal that it let American individuals to trade cryptocurrencies that, despite its understanding and complacency, needed SEC certification as securities. The complaints contend that as a consequence of the earlier activities, Coinbase’s public claims were consistently, and to a large extent, incorrect and deceptive.
SEC investigating alleged trading of unregulated securities
In the past, Coinbase has been a party to a number of legal disputes and contentious circumstances. The SEC is looking into Coinbase for purportedly dealing with unregulated securities, which is why the two new lawsuits have been filed.
In a different complaint, Ishan Wahi, a former Coinbase global product manager, is charged with insider trading. Wahi entered a not guilty plea to two charges of conspiracy to commit wire fraud in a Manhattan federal court. He was detained in May while attempting to board a trip to India, and charges were filed against him in July.