The timing could not be worse, as the brokerage house is planning an IPO early next year.
Coinbase, the largest cryptomaniac broker in the United States, was sued for receiving commissions from the „illicit“ sales of Ripple’s cryptomaniac, XRP.
„A new federal lawsuit alleges that Coinbase violated state unfair competition laws by selling XRP, allegedly an unregistered title, and receiving commissions for the sale.
The timing could not be worse, as the brokerage firm is planning an IPO early next year. The company had already announced the suspension of negotiations with the digital asset.
The U.S. Securities and Exchange Commission (SEC) sued Ripple for illegal sale of XRP in mid-December.
The lawsuit against Coinbase is a class action lawsuit aimed at recovering securities lost by investors who bought the XRP sold „illegally“ by the brokerage house.
The lawsuit says the company sold XRP (unauthorized) claiming that the success or failure of the asset was linked to Ripple. However, according to the nature of the action, Coinbase „knew that XRP was not a commodity but a security.
„Despite knowing that XRP was a real estate title, Coinbase continued to offer XRP to the public and earned commissions for sales.
The currency depreciated more than 70% after the SEC sued Ripple. The case therefore wants Coinbase to be held responsible for the damage caused to investors who felt cheated by the company.
The case describes XRP’s entire history to date, stating that Coinbase was selling the asset, knew it was a real estate security, then the SEC sued Ripple, and Coinbase announced the suspension of the digital currency, causing the price of the token to fall by half.
The class action asks that „all persons who bought XRP from Coinbase be compensated for damages and other „potential recoveries.
The lawsuit therefore wants the defendant (Coinbase) to pay compensation to all investors who bought the digital asset on the platform.