Coinbase hit by another Class Action Lawsuit While attempting to gain respite from Supreme Court
New lawsuits have been piling up against the US crypto company Coinbase soon after an ongoing investigation by the securities regulator was revealed.
As per Bragar Eagel & Squire, P.C., a stockholder rights law firm, a new class action lawsuit has hit Coinbase Global Inc. in the United States District Court of New Jersey on behalf of holders that bought or acquired Coinbase securities between April 14, 2021, and July 26, 2022.
Exchange accused of making ‘false and misleading’ statements
The firm has opened the plea for investors up until October 3, 2022, stating, “The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies.”
The lawsuit circles around the time Coinbase revealed that its customers will be treated as unsecured creditors in case of bankruptcy proceedings in the platform’s Q1 report for 2022. While the stocks fell in the next day’s market open, Coinbase’s Chief Executive Officer, Defendant Brian Armstrong, did admit that it was a delayed disclosure soon after in the month of May.
Once again, Bloomberg’s report that the Securities and Exchange Commission (SEC) is looking into Coinbase for allowing Americans to trade unregistered securities further weakened the price of the common shares in the next market open, burning pockets of the shareholders. In the meantime, Pomerantz LLP has also set in motion a class action lawsuit against Coinbase and some of its officers as per a recent release.
Fresh legal troubles after approaching SC
Notably, the fresh legal trouble comes a day after Coinbase Global requested the US Supreme Court to put a stop to the litigation while it pursues appeals to have the filed cases arbitrated outside the court. The platform had also asked for emergency intervention in the filings, saying that it would suffer “irreparable harm” if the lawsuits were allowed to go on.
The piling legal troubles comes when Senator Cynthia Lummis’ office reportedly confirmed that Coinbase is among 40 platforms that are being investigated. While that happens, Coinbase is on the brim of releasing its earnings for the second quarter after announcing a massive partnership with BlackRock. While the deal positively impacted the price of the COIN shares, regulatory hullabaloo can keep pulling the Nasdaq listing.
On the back of a weak market, Zacks Equity Research predicts that Coinbase will post “a year-over-year decline in earnings on lower revenues” for the quarter ended June 2022.
Zacks estimates that revenues will be close to $877.32 million, down 60.6% from the year-ago quarter. Since the listing, Coinbase is down over 60% with Ark Investment Management dumping over 1.41 million shares from three of its funds last week.