Coinbase is being accused of selling unlicensed securities by three of its users.
The users are seeking $5m on behalf of themselves and any other user who purchased Dogecoin, Solana and Cardano, as well as over 70 other tokens on the platform.
The accusations claim that Coinbase should have registered with the US Securities and Exchange Commission (SEC) as a national securities exchange before selling securities (investment contracts).
Such actions are typically those of stock exchanges, placing Coinbase in the firing line and subject to regulatory and reporting obligations.
Users also claim that Coinbase is violating both federal and state securities, and according to those who filed the suit, everyone who bought tokens should be compensated for any losses accrued while trading.
A suggestion has also been made to the judge for the company to stop selling certain tokens altogether, including Chainlink, Polygon and Shiba Inu.
CEO Brian Armstrong was named in the lawsuit as a defendant with quotes from a recent speech by SEC chairman Gary Gensler that referred to the crypto world as the ‘Wild West’ suggesting that Coinbase and other exchanges were providing unlicensed securities.
Such controversy could pose a threat to Coinbase’s business. Last April, a similar accusation rose to the surface with around seven class-action lawsuits against crypto presented to the courts.
However, it has been announced that the cryptocurrency exchange has just added the Solana network to its wallet, a move that rivals competitors and makes way for user expansion on its exchange platform.
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