San Francisco-based cryptocurrency exchange Coinbase has been slammed with two additional legal claims.
Coinbase is presently being investigated by the United States Securities and Exchanges Commission (SEC).
New York-based legal firm Bragar Eagel & Squire has revealed that it would be suing Coinbase for making deceptive claims about its business practices.
Pomerantz LLP has also allege that the exchange violated federal securities laws. This lawsuit was filed to compensate the plaintiffs.
In both complaints, plaintiffs claim that Coinbase made fraudulent and deceptive representations regarding the company’s business, operations and compliance efforts between April 14, 2021 and July 26, 2022.
According to the complaints, Coinbase neglected to disclose that client cryptocurrency was kept in escrow at Coinbase, making it part of a bankruptcy estate subject to bankruptcy proceedings in which customers would be treated as general unsecured creditors of the company.
Furthermore, Coinbase reportedly refused to disclose that it permitted U.S. citizens to trade digital assets that—despite its knowledge and complacency—required SEC registration as securities.
Coinbase is being investigated by the SEC for allegedly trading unregistered securities. Ishan Wahi, a former global product manager for Coinbase, is being accused of insider trading in a separate lawsuit.