Lawsuit filed against Coinbase over allegedly misleading statements

The law firm Scott + Scott filed a class-action suit against Coinbase in the United States District Court for the Northern District of California. The suit stems from the company’s statements, Law360 reports.

In addition to the platform, the defendants include its CEO Brian Armstrong, Chief Legal Officer Paul Grewal and other top executives.

According to shareholder Donald Ramsey, the executives made “misleading statements” in the filings and published positive assertions that “had no reasonable basis”.

He also pointed to the exchange’s decision to raise $1.25 billion after its Nasdaq listing and noted a series of platform outages during the May crash.

“During the Offering: (1) the company required a substantial infusion of cash; (2) the platform was prone to outages that were becoming increasingly likely as the service scaled to a broader user base,” — the filing says.

Ramsey asserts that Coinbase’s stock price fell after the public saw alleged discrepancies “between its self-presentation and reality”.

“As a result of the defendants’ improper actions and omissions, as well as the sharp decline in the market value of the company’s securities, the plaintiff and other members of the class suffered substantial losses and damages,” — the filing states.

On April 14, there was a direct listing of Coinbase’s shares on Nasdaq. The opening price was $381. During the first trading session, the company’s market capitalization exceeded $85 billion.

Against the backdrop of the June market correction the bitcoin-exchange’s shares briefly fell to $210.77 per share, a record low. They are currently trading around $225.

Earlier, Coinbase announced a fivefold increase in its customer-support staff after numerous customer complaints.

Earlier in July a Dogecoin holder filed a suit against Coinbase. He argues that the exchange improperly concealed the possibility of free participation in the giveaway.

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