Legal proceedings against Coinbase have entered a new phase after a judge ruled that the company must face allegations of selling unregistered securities.
Allegations Against Coinbase
A U.S. federal judge ruled that Coinbase must face an investor lawsuit in New York. Judge Paul Engelmayer determined that Coinbase transacted directly with its customers, acting as a seller. The lawsuit alleges that Coinbase offered and sold 79 cryptocurrencies classified as securities without registering as a broker-dealer. The case was initially dismissed in February 2023 by the District Court of Southern New York, but later revived by the Circuit Court of Appeals.
Coinbase's Response to Allegations
Coinbase maintains that it does not list, offer, or sell securities on its exchange. A company spokesperson remarked that today's court decision has significantly narrowed the scope of discovery in the case.
Ongoing Legal Battle
Coinbase is also embroiled in a separate lawsuit with the SEC, which accused the exchange in June 2023 of operating an unregistered securities platform and failing to register as a broker. In January 2025, Coinbase petitioned a U.S. appeals court to rule that cryptocurrency transactions should not be classified as securities trades, arguing they are merely asset sales. Additionally, Coinbase sued the FDIC, alleging it attempted to 'cut off digital-asset firms from essential banking services'.
The legal battles involving Coinbase continue. The outcomes of these cases could have significant implications for future cryptocurrency market regulation.
