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Another Lawsuit: Coinbase Sued Over NASDAQ Listing

Another Lawsuit Coinbase Sued Over NASDAQ Listing
  • Coinbase is on the wire again as it faces another lawsuit.
  • This time, the lawsuit is over the NASDAQ offering made in April 2021.
  • The previous lawsuit was over a ‘misleading’ Dogecoin ad campaign.

Coinbase is under fire again. This time the notable cryptocurrency exchange is facing a lawsuit over a NASDAQ listing. Specifically, the lawsuit pertains to the direct offering made by the company in April 2021.

In detail, this offering allowed trading Coinbase (COIN) options on the NASDAQ. This launch of the equity on the stock offered another way for investors to bet on the movement of the price of COIN.  

To highlight, the offering had Coinbase make 114,850,769 shares of its class A common stock. Once ready, the public began buying the stocks. Notably, the shares began trading on the NASDAQ at $381. 

However, the issue arose when Coinbase allegedly failed to clearly state that it needed a ‘sizeable cash injection’. Moreover, it also skipped that its ‘platform was susceptible to service-level disruptions’ and that this could increase as the company scaled its services along with its growing user base.

In particular, Coinbase Inc., along with certain Coinbase directors, officers, and some venture capital firms are all facing the backlash. Since each of these entities and individuals benefited from the offering, they will all be facing the securities class action lawsuit.

The charges came from Scott+Scott Attorneys at Law LLP. This international shareholder and consumer rights litigation firm filed the lawsuit on behalf of Donald Ramsey. They will also represent others who bought Coinbase Class A common stock.

This stock can be traced to the company’s offering materials. Specifically, the registration statement and prospectus, in particular, are allegedly marked as ‘false and misleading’. Therefore, the litigators remark that the positive statements made by the company’s operations, business, and prospects lack a reasonable basis.

Unfortunately, this is Coinbase’s second lawsuit in less than 10 days. Just about a week ago, the exchange received legal charges due to an allegedly misleading Dogecoin (DOGE) ad campaign. In detail, the lawsuit is seeking about $5 million in damages.

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