Cryptocurrency exchange Coinbase, its executives and investors filed a class action lawsuit over the company’s direct listing on Nasdaq. “According to the complaint, the registration statement and prospectus used to implement the company’s issuance are false and misleading,” the lawsuit states.

Class action lawsuit against Coinbase

  • The Scott+Scott law firm announced on Friday that it has filed a securities class action lawsuit against Coinbase Global Inc. (NASDAQ: COIN), with Donald Drumsey as the lead plaintiff.
  • The lawsuit also named several Coinbase directors and executives as defendants, including CEO Brian Armstrong. Other defendants include venture capital firms and investors that benefited from Coinbase’s direct offering, including Marc Andreessen, Fred Ehrsam, Fred Wilson, AH Capital Management, Tiger Global Management, Union Square Ventures, and Viserion Investment.
  • Coinbase is the largest cryptocurrency exchange in the United States. According to its website, the company currently has approximately 56 million verified users, 8,000 institutions, and 134,000 ecosystem partners in more than 100 countries.
  • The company went public on the Nasdaq on April 14 and offered 114,850,769 Class A common shares to the public. Coinbase’s stock began trading on the Nasdaq exchange at a price of $381 per share.
  • The law firm explained:

According to the complaint, the registration statement and prospectus used to implement the company’s issuance are false and misleading.

  • In addition, it is said that Coinbase “omits the explanation, at the time of issuance”, it “needs a large amount of cash injection”, and its “platform is vulnerable to service level interruption, which is more and more likely to happen as the company expands its service scale “To a larger user base. In addition, the lawsuit alleges that “due to the above-mentioned reasons, positive statements about the company’s business, operations, and prospects are materially misleading and/or lack reasonable basis. “
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Coinbase, executives, and investors are sued for NASDAQ listing
Coinbase Global (NASDAQ: COIN) stock chart

  • The lawsuit further stated:

As the truth about the company’s need to raise cash and the limitations of its platform spread to the market, the value of Coinbase’s stock fell sharply.

What do you think of the lawsuit against Coinbase, its executives and investors? Let us know in the comments section below.

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Brian Armstrong, Brian Armstrong sue, class action, Coinbase, coinbase exchange, coinbase lawsuit, coinbase lawsuit, direct listing, IPO, lawsuit, NASDAQ listing, public listing

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