New Class Action Lawsuit Filed Against Coinbase Stock Down 2.45%

May 4

Coinbase Global (COIN) and CEO Brian Armstrong are facing a class action lawsuit from complainants claiming that the company misled them into buying securities. The lawsuit argues that digital assets listed on Coinbase are securities, and they also allege that Coinbase Earn accounts violated securities laws by advertising and promoting for higher yields. The plaintiffs also claim that Coinbase (COIN) admitted it is a "Securities Broker" in its user agreement, making digital asset securities sold by the exchange as investment contracts or other securities.

The plaintiffs are seeking full recession, statutory damages under state law, and injunctive relief in a demand for a jury trial. The lawsuit is similar to other class actions and the SEC lawsuit. Coinbase (COIN) has escalated its legal dispute with the U.S. SEC by filing an interlocutory appeal on the "investment contract" definition. Coinbase's CLO, Paul Grewal, believes that the exchange has a higher chance of victory as the SEC's interpretation of investment contracts doesn't align with Second Circuit and Supreme Court cases.

Coinbase's interlocutory appeal is also critical for the Ripple Vs SEC lawsuit, as the SEC could appeal Judge Torres' ruling that programmatic sales of XRP are not securities.

Technical Outlook
Coinbase Stock (COIN) was down 2.45% on Friday's market close trading below the 50-day Moving Average with a Relative Strength Index (RSI) of 48.39.