Customers of the cryptocurrency exchange filed a lawsuit against Coinbase and its CEO Brian Armstrong, but the judge in the case dismissed it.
In the complaint, Coinbase is accused of selling 79 crypto tokens that are unregistered securities.
Customers of cryptocurrency exchange Coinbase (Nasdaq: COIN) filed a proposed class action lawsuit in Manhattan, and U.S. District Judge Paul Engelmayer on Wednesday dismissed it with prejudice, effectively barring future filings, according to Reuters.
In March of last year, a lawsuit was brought against Coinbase Global Inc., Coinbase Inc., and CEO Brian Armstrong.
Due to Coinbase’s lack of SEC registration, the plaintiffs in the lawsuit claim that the sale or solicitation of cryptocurrency tokens was illegal and resulted in losses for them (SEC)
The plaintiffs argued that Coinbase served as a “intermediary,” making it the “actual seller” of the crypto tokens as opposed to other crypto trading platforms that only connect buyers and sellers.
Judge Engelmayer ruled that the customers could not establish that the cryptocurrency exchange had ownership of or sold the crypto tokens they traded on the Coinbase and Coinbase Pro platforms. Judge Engelmayer did not state whether the 79 crypto tokens are securities.
Despite reportedly pushing the cryptocurrency tokens by emphasising their “purported value proposition” and taking part in “airdrops” to boost trading volume, the judge also determined that Coinbase had no direct involvement in the transactions.
In a previous statement, Coinbase noted that it had received subpoenas from the Securities and Exchange Commission (SEC), which sought details about the platform’s listing procedures.
He has adamantly urged cryptocurrency lending and trading platforms to apply for SEC registration.