Bragar Eagel & Squire, PC has launched a new class action lawsuit against Coinbase Global Inc., alleging that the defendants made materially false and misleading statements.
Coinbase experiences another class action lawsuit while trying to get a reprieve from the Supreme Court
New lawsuits have been racked up against US exchange Coinbase shortly after an ongoing investigation by the securities regulator was revealed.
According to Bragar Eagel & Squire, PC, a shareholder rights law firm, a new class action lawsuit has hit Coinbase Global Inc. in the United States District Court of New Jersey on behalf of holders who bought or acquired Coinbase securities between April 14, 2021, and July 26, 2022.
Exchange Accused of Making “False and Misleading” Statements
The firm has opened the plea for investors until October 3, 2022, stating: “The lawsuit alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding business policies, company operations, and compliance.
The lawsuit centers around the time Coinbase disclosed that its customers will be treated as unsecured creditors in bankruptcy proceedings in the platform’s Q1 2022 report.
While shares fell at the market open the following day, Coinbase CEO defendant Brian Armstrong admitted that it was a delayed disclosure shortly after in May.
Additionally, Bloomberg’s report that the Securities and Exchange Commission (SEC) is investigating Coinbase for allowing Americans to trade unregistered securities further weakened the price of common shares in the upcoming open market, burning the pockets of shareholders.
Meanwhile, according to a recent statement, Pomerantz LLP has also launched a class action lawsuit against Coinbase and some of its officials, based on the presumption that Coinbase allowed Americans to trade digital assets that Coinbase knew or recklessly disregarded should have been registered as securities with the SEC.
To such allegations, last May Coinbase’s Chief Executive Officer, Defendant Brian Armstrong, stated: “We should have updated our retail terms sooner, and we didn’t communicate proactively when this risk disclosure was added. My deepest apologies, and a good learning moment for us as we make future changes.”
New Legal Problems after Approaching SC
The new legal issue comes a day after Coinbase Global petitioned the US Supreme Court to halt the litigation, while it files appeals to have the cases filed arbitrated out of court.
The platform had also called for an emergency intervention on the submissions, saying it would suffer “irreparable harm” if the lawsuits were allowed to continue.
Legal troubles mount as Senator Cynthia Lummis’ office confirmed that Coinbase is among 40 platforms being investigated. While that is happening, Coinbase is about to release its Q2 earnings after announcing a massive partnership with BlackRock. While the deal had a positive impact on COIN’s share price, the regulatory uproar may continue to spark the Nasdaq listing.
On the other hand, Zacks Equity Research predicts that Coinbase will post “a year-over-year decline in earnings due to lower revenues” for the quarter ending June 2022.
Zacks estimates that revenue will be close to 877.32 million dollars, 60.6% less than in the same quarter of the previous year. Since listing, Coinbase is down more than 60% and Ark Investment Management dumped more than 1.41 million shares of three of its funds last week.
By Audy Castaneda
