On February 8, 2025, A U.S. federal judge ruled that Coinbase, a prominent crypto exchange, must face a lawsuit from customers accusing it of illegally selling unregistered securities.
Judge Paul Engelmayer of the U.S. District Court in Manhattan rejected Coinbase’s argument that it was not a “statutory seller” under federal securities laws. “Customers on Coinbase transact solely with Coinbasse itself,” the Judge stated, citing that the exchange qualifies as a seller of 79 tokens in question.
???? Major legal blow for Coinbase! A judge has ruled they must face a class action lawsuit over claims of illegally selling securities, including tokens like $SOL, $MATIC, $NEAR, $MANA, and $ALGO. Coinbase insists they don’t sell securities—will they prevail? ???? #Crypto #Coinbase
— quAInt (@crypto_quAInt) February 7, 2025
The ruling also upholds claims under California, Florida, and New Jersey laws, stating that customers have sufficiently alleged that Coinbase directly sold the tokens. Coinbase, however, maintains its stance, asserting that “Coinbase does not list, offer, or sell securities on its exchange.”
The fresh legal trouble is a huge setback for Coinbase, which has previously seen this lawsuit dismissed in February 2023. However, the 2nd U.S. Circuit Court of Appeals unearthed key parts of the case last April. Customers are seeking unspecified damages.
The exchange is also battling a lawsuit from the U.S. Securities and Exchange Commission (SEC), which alleges that Coinbase allowed the trading of tokens that should have been registered as securities.
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