Coinbase Faces Class Action Lawsuit for Selling XRP Tokens

Key Takeaways

  • A class-action lawsuit has been filed against Coinbase for the sale of XRP tokens.
  • The plaintiff has alleged that Coinbase knew about XRP’s security status and yet proceeded to profit from its sale.
  • The lawsuit claims that Coinbase is in violation of California’s unfair competition laws.

The plaintiff, Thomas Sandoval, has filed a class-action lawsuit in the Northern District Court of California against Coinbase for profiting from XRP tokens’ sale.

Coinbase in the Crosshairs

Sandoval, hailing from St. Louis County, alleges that Coinbase was aware that XRP is an unregistered security and yet proceeded to sell XRP on their exchange. 

Coinbase profited by earning a commission on these tokens’ sale, therefore violating California’s unfair competition law.

“Coinbase sold a token called Ripple (hereafter referred to by its trading symbol: XRP), the value of which was entirely linked to the success or failure of Ripple Labs, Inc. (Ripple Co.), the company that created the token, and the managerial efforts of Ripple Co. executives. Investors in XRP, such as Plaintiff, reposed an expectation of profit in such managerial efforts by Ripple Co. executives and purchased the token in order to make money on their investment,” the statement read.

Ripple Inc. is also being sued by the SEC for selling XRP tokens. The pre-trial will begin on Feb. 22. Meanwhile, Ripple has stated that they will continue to operate in the United States despite the lawsuit.

Coinbase will fully halt XRP trading on Jan.19. However, the token will remain listed as it will still be available on Coinbase Custody and the Coinbase Wallet.

The exchange has faced other serious allegations which claim that they have discriminated against women and people of color. This recent news does not bode well for the company, which is currently in the process of launching its Initial Public Offering (IPO).

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Source: Read Full Article