Coinbase Emerges Victorious in Securities Lawsuit
Coinbase, a prominent cryptocurrency exchange, has secured a significant legal win as the U.S. Court of Appeals for the Second Circuit rules in its favor.
The court’s decision confirms that the secondary trading of cryptocurrencies on Coinbase’s platform does not violate the Securities Exchange Act, impacting a nationwide group of users who traded tokens on the platform.
The lawsuit, spanning from Oct. 8, 2019, to March 11, 2022, questioned whether cryptocurrencies traded on Coinbase met the criteria for securities. Plaintiffs filed federal claims under various sections of securities laws alongside state law claims, alleging unregistered securities offerings and violations of securities regulations.
Coinbase argued that secondary crypto-asset sales did not fall under securities transaction criteria, challenging the relevance of securities regulations. While the court upheld some lower court decisions, it overturned others, including liability under the Securities Act but rejecting claims under the Securities Exchange Act due to insufficient evidence.
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The ruling focused heavily on interpreting Coinbase’s evolving user agreements, emphasizing the need for clarity on applicable versions to resolve discrepancies. Plaintiffs see the decision as progress in holding crypto platforms accountable, while Coinbase maintains it reinforces the stance that secondary crypto sales are not securities transactions.
Coinbase’s Chief Legal Officer, Paul Grewal, expressed gratitude on social media, highlighting the court’s affirmation regarding private liability and the importance of contracts in digital asset trading.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
