Coinbase, one of the world’s most popular cryptocurrency exchanges, is staring down the barrel of a class action lawsuit in relation to its NASDAQ listing.
Several US legal firms have announced that they have filed class action lawsuits against Coinbase Global Inc and certain Coinbase directors, such as Brian Armstrong (CEO), and officers for securities fraud in relation to Coinbase’s public listing in April.
What’s the Case Against Coinbase?
Coinbase went public on April 14 with a direct listing on NASDAQ, making available 114,850,769 shares, which began trading at $381 per share. The lawsuit alleges that at the time of the offering, Coinbase failed to disclose that it “required a sizeable cash injection” and its “platform was susceptible to service-level disruptions, which were increasingly likely to occur as the company scaled its services to a larger user base”. The lawsuit argues Coinbase’s share price declined dramatically when those factors became known to the market.
A Flip of the Coin
Coinbase is a juggernaut in the crypto world, with around 56 million verified users, 8,000 institutions, and 134,000 ecosystem partners in more than 100 countries. In April, a week before Coinbase’s public lisiting, its valuation hit US$1.8 billion with a surge in new users.
It remains to be seen what kind of impact this lawsuit will have on Coinbase’s operations and its global reputation. It could end with a routine settlement and Coinbase continuing with business as usual. There’s also a possibility it could drag on and greatly tarnish the exchange’s reputation.
Perhaps Brian Armstrong will become the latest billionaire to launch himself into space and just wait until the whole thing blows over.
Disclaimer:
The content and views expressed in the articles are those of the original authors own and are not necessarily the views of Crypto News. We do actively check all our content for accuracy to help protect our readers. This article content and links to external third-parties is included for information and entertainment purposes. It is not financial advice. Please do your own research before participating.
Credit: Source link
