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Coinbase must face customer lawsuit in New York - REUTERS
NEW YORK, Feb 7 (Reuters) - Coinbase (COIN.O) must face a lawsuit by customers who accused the largest U.S. cryptocurrency exchange of illegally selling securities without registering as a broker-dealer, a federal judge ruled on Friday. U.S. District Judge Paul Engelmayer in Manhattan rejected Coinbase's argument it did not qualify as a "statutory seller" under federal securities law because it never passed title to 79 tokens that the customers traded.
The judge cited the accusation that "customers on Coinbase transact solely with Coinbase itself," necessitating a conclusion that Coinbase was a seller.
Engelmayer also refused to dismiss claims under the laws of California, Florida and New Jersey, saying customers adequately alleged that Coinbase was a direct seller of the tokens.
"Coinbase does not list, offer, or sell securities on its exchange," Coinbase said in a statement. "We look forward to vindicating the remaining claims in the district court."
