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Coinbase Facing $5M Lawsuit Involving Dogecoin And 78 Cryptocurrencies Over Allegation Of Selling Unlicensed Securities

Like most other market sectors, the crypto industry is not immune to court cases involving several parties within and outside the ecosystem. Ripple has an ongoing case against the U.S. SEC where the allegation of operating an unregistered account was slammed against Ripple.

A new event has occurred involving two actors within the cryptocurrency industry; the latest development has seen Coinbase Global Inc., creators of the COIN token, slammed with a massive lawsuit by other crypto players.

According to reports, Coinbase is alleged to be operating an unregistered securities exchange to the shock of many industry players, culminating in a class-action lawsuit against Coinbase.

Matters Arising

The Southern District Court located in New York has received a complaint filed on March 11 alleging the involvement of Coinbase in the sale of about 79 crypto tokens that are not registered securities.

According to the filed complaint, the three plaintiffs fingered many large crypto networks among the list of unregistered securities, including Dogecoin, Cardano, Decentraland, Polkadot, and Shiba Inu.

All the unregistered securities mentioned are a combination of their native tokens and the U.S. dollar (USD).

The concerned plaintiffs are users of the Coinbase platform; they claimed that the platform violated federal and state laws through its involvement in selling unregistered assets. They want the platform to settle with all users who incurred massive losses in trading the said tokens.

However, the users added in the lawsuit that the likes of Bitcoin and Ethereum should not be categorized as unregistered securities due to their decentralization features.

Reasons for the Lawsuit

Last year, Coinbase halted the transactions of Ripple on its network after the SEC lawsuit against Ripple revealed that Ripple’s token, XRP, is an unregistered security that is not licensed for trading.

Coinbase is known to have previously voiced its concern about following the regulations in the transaction of digital assets and has even made suggestions for a smooth policy regulation in the digital space.

However, the suggestions put forth by Coinbase as recommendations for regulating the activities of crypto exchange platforms have been met with opposition. Notable among the critics of the recommendation is Robinhood Market Inc.

Robinhood Market Inc is a leading player in the retail brokering space and has, through its head of legal department, called the recommendations put forward by Coinbase as a “dumb idea.”

Elon Musk Take a Dig at SEC

The Tesla boss is known to have an ongoing court case with the regulatory agency following the heavy fine he was slammed with and has vowed to pursue the case to the end.

Musk alleged that the SEC released sensitive official reports about the case involving Tesla and the regulatory body. The public was given hints about an ongoing case that had not been concluded.

Part of the condition of the running legal battle is that the billionaire should step down from the board of Tesla, which Musk agreed to. 

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