Another lawsuit has been filed against prominent United States-based cryptocurrency exchange Coinbase. This time, a group of investors alleged that the business made false and misleading representations that contributed to the sharp decline in the stock price of COIN between April 14, 2021, and July 2022.
Since going public, Coinbase “made materially false and misleading statements regarding the Company’s business, operations, and compliance policies,” according to the class action lawsuit filed in the United States District Court for the District of New Jersey.
Long-term stockholders and investors who lost money during the “Class Period” can join the lawsuit for free, according to Bragar Eagel & Squire, P.C., a nationally renowned stockholder rights law firm.
Two significant occurrences that had a negative impact on COIN’s price were emphasized in the class action notification. The company’s contentious risk disclosure came first, and the SEC investigation came second.
Troubles Coinbase is facing
Notably, on April 14, 2021, Coinbase went public by way of a direct listing on Nasdaq. The stock of the company opened at almost $400 and ended the first trading day at $328. Coinbase shares has been following a declining trajectory since then, and it is currently trading at $88.90, down 74 percent from its peak.
Following the controversy in May, the exchange encountered a significant setback last month when the Securities and Exchange Commission or SEC started looking into whether Coinbase had issued unregistered securities to American investors, as TheCoinRise reported.
The exchange’s Q1 earnings report, which was made public on May 10, 2022, showed that the company lost $430 million between January and April. The results were worse than expected, but the earnings report’s risk disclosure infuriated the exchange’s users.
If Coinbase ever files for bankruptcy, consumers might no longer have access to the assets they have held on the exchange, according to a disclosure filing with the U.S. SEC.
Original Source: https://thecoinrise.com/what-is-coinbase-accused-of-in-this-new-lawsuit/
Author : Anisha Pandey
