A new class action lawsuit has been filed against Coinbase and its CEO, Brian Armstrong, alleging that investors were misled into buying securities and that the company's business model is illegal.
The lawsuit, filed in the US District Court for the Northern District of California's San Francisco Division, represents plaintiffs from California and Florida and claims Coinbase has knowingly violated state securities laws since its inception.
According to the complaint, Coinbase's sale of digital assets, including Solana's SOL, Polygon's MATIC, Near Protocol's NEAR and others are considered securities.
The plaintiffs also allege Coinbase acknowledges its role as a "securities broker" in its user agreement, further solidifying their argument that digital asset securities sold by the exchange should be viewed as investment contracts or other securities.
They also claim that Coinbase Prime, the company's brokerage division, falls into the category of securities broker.