On Thursday, the share prices for Coinbase recorded a major boost. The surge was recorded after the federal judge made an announcement on a lawsuit that the exchange had been facing for a while.
Class-Action Suit was dismissed
The federal judge reportedly dismissed the class-action suit that the exchange had been facing for a while. With the dismissal of the class action, the share prices for the cryptocurrency exchange recorded a significant surge.
This happened as the cryptocurrency exchange had a legal victory. This is an occurrence that was never witnessed in the cryptocurrency industry.
The recent victory of the exchange has boosted the confidence of the entire cryptocurrency industry. It has encouraged the entire cryptocurrency industry, giving them hope that legal victory is possible against the lawsuits.
Following the announcement of the dismissal, the share prices for the company have recorded a huge surge. The share prices for publicly-listed cryptocurrency exchanges were boosted by 24% in the latest trading session.
Claim by the Plaintiffs
The Coinbase plaintiffs had claimed that the cryptocurrency exchange was reportedly selling assets to the users. It also claimed that the assets it was selling to the users were under its ownership.
Therefore, despite selling the assets to the end users, the exchange held the ownership title over them.
On the other hand, the 27-page opinion that the plaintiffs added claimed that the exchange was neither buying nor selling the cryptocurrency assets to the users.
They referred to the user agreement that the exchange had provided to the users revealing that the assets would become the owner of the users once sold.
However, the judge dismissed the claim made by the plaintiffs, mentioning that the same case could not be refiled by the plaintiffs.
This ended up resulting in the dismissal of a lawsuit action against the exchange. Although it is a rare occurrence Coinbase is not the only exchange that has emerged victorious against legal action.
Binance also won a legal battle where somewhat similar claims were made by the plaintiffs.
In addition to the above, the plaintiffs had claimed that the exchange had made an attempt of selling the securities to the users. They attempted to do it by soliciting efforts.
Even the particular claim made by the plaintiffs was dismissed by the district court judge, Engelmayer.
It was back in October 2021 when the plaintiffs had filed a lawsuit against the Coinbase exchange.
The lawsuit filed by the plaintiffs addressed Brian Armstrong, the CEO of Coinbase, as the primary contact, referring to him as the “control person”.
The reporting sources did reach out to the exchange for a comment but they failed to get any. So far, the exchange has provided no explanation for the ruling.
The cryptocurrency industry has faced several legal actions in the year 2022 and the streak continues even in the ongoing year.
Among all the regulators, it is the US Securities and Exchange Commission that has proven to be the fiercest regulatory authority.
Gary Gensler, the chairman of the US SEC has been actively monitoring the entire cryptocurrency industry. In his supervision, the US SEC has gone against several major cryptocurrency projects and companies.
Things were unfortunate for Coinbase as the US SEC filed a lawsuit against the respective cryptocurrency exchange.
This worsened the situation for the cryptocurrency exchange in the year 2022 and it hoped to make a comeback in the stock market.
Finally, with the victory earned against the plaintiffs, the exchange will be able to redeem itself.
Its reputation has surged significantly and it has been reflected through the recent push the exchange has witnessed in the stock market.
Although the Coinbase exchange is out of trouble, other major exchanges such as Gemini are still under the hot waters. Another crypto entity “Genesis Trading” is also facing legal action by the US SEC.