A US federal judge has rejected Coinbase's argument that it does not meet the legal definition of a "statutory seller," leading the exchange to face a lawsuit from investors in New York.
According to a Feb. 7 Reuters article, US District Judge Paul Engelmayer has ordered Coinbase to respond to plaintiffs' allegations that it has sold securities without registering as a broker-dealer. The plaintiffs specifically allege that Coinbase has sold 79 securities without proper registration.
The class action was initially dismissed in February 2023 by the Southern District Court of New York, but the Circuit Court of Appeals revived portions of the suit more than a year later.
Judge Engelmayer stated that "customers on Coinbase transact solely with Coinbase itself," suggesting that the platform operates as a seller.