Coinbase faced a lawsuit over the unlicensed sale of securities

The plaintiffs claim that the 79 tokens traded on the platform are securities and their sale should be made illegal

18.03.2022 - 10:10

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What’s new? Three clients of the Coinbase cryptocurrency exchange have filed a class-action lawsuit against the trading platform in the Southern District Court of New York after purchasing tokens. According to the plaintiffs, 79 tokens are securities and their sale should be declared illegal. The list includes Polkadot (DOT), Dogecoin (DOGE), Chainlink (LINK), Solana (SOL), and Ripple (XRP).

Link to the lawsuit

What does the lawsuit say? The plaintiffs Christopher Underwood, Louis Oberlander, and Henry Rodriguez allege that Coinbase operates as an unregistered securities exchange. The lawsuit cites the Securities and Exchange Commission (SEC) chief Gary Gensler and his recent comments on Coinbase’s registration status.

Gensler told the Senate Banking Committee that Coinbase has not registered with the SEC “even though they have dozens of tokens that may be securities.”

What are the precedents so far? In late 2020, the SEC accused Ripple of illegally selling $1,3 billion in unregistered securities under the guise of XRP tokens. As of March 2022, the litigation continues as the parties have not reached an agreement.

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