NEW YORK–(BUSINESS WIRE)–Bragar Eagel & Squire, PC, a nationally recognized shareholder rights law firm, reminds investors that a class action lawsuit has been filed against Coinbase Global, Inc. (“Coinbase” or the “ Company”) (NASDAQ: COIN) in the United States District Court for the District of New Jersey on behalf of all persons and entities who purchased or otherwise acquired Coinbase securities between April 14, 2021 and September 21, 2022 , both dates inclusive (the “Class Period”). Investors have until October 3, 2022 to ask the Court to be named lead plaintiff in the lawsuit.
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Coinbase, a Delaware company, is one of the largest crypto asset exchanges in the world. Common shares of Coinbase trade in the United States on the NASDAQ under the symbol “COIN”.
The Class Period begins on April 14, 2021, to coincide with the initial listing of the Company’s common stock on NASDAQ (the “Direct Listing”). The registration statement and prospectus filed in connection with the direct listing (collectively, the “Registration Materials”) included a letter from Defendant Brian Armstrong, Co-Founder, Chief Executive Officer and President of the Company, in which Armstrong touted Coinbase’s commitment to maintaining customer trust. Defendant Armstrong also highlighted the company’s commitment to compliance, stating that “[f]from the earliest days, [the company] decided to focus on compliance, proactively reach out to regulators to be an educational resource, and get licenses before they’re even needed. Highlighting customers’ ability to rely on Coinbase as a custodian of crypto assets in the listing materials, the defendants also noted Coinbase’s ability to “support over 90 crypto assets for trading purposes. or guard”. Additionally, while the defendants described certain risk factors associated with safeguarding client assets, they gave no indication that the assets held in custody could be treated as the property of the company rather than that of the clients. in the event of Coinbase’s bankruptcy. Finally, the listing documents described the limited circumstances in which Coinbase sold its own crypto assets, with the defendants explaining that revenue from such sales was limited to “periodic.””cases in which, “as an accommodation for customers, [Coinbase] can execute customer transactions using [the Company’s] own crypto assets.
Throughout the class action period, defendants continued to tout Coinbase’s strength as a crypto custodian and commitment to regulatory compliance, in addition to denying that Coinbase engaged in proprietary trading. . For example, at a Goldman Sachs financial services conference on Dec. 7, 2021, the accused Emilie Choi, the company’s president and chief operating officer, pointed to the firm’s firm policy against trading for account. clean, explaining, “I mean, I think it’s pretty obvious in a way. It’s just that people don’t want to feel like you’re trading – institutions don’t want to feel like you go negotiate against them, and so we always had a clear line about not doing it.
However, the truth began to emerge on May 10, 2022, when Coinbase filed its Q1 2022 financial report with the SEC. In this report, Coinbase revealed for the first time that, “because crypto assets held in custody may be considered the property of bankruptcy estate, in the event of bankruptcy, crypto assets [the Company] held in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors. Later that day, Defendant Armstrong admitted on Twitter that Coinbase had failed to properly communicate this risk to investors, stating that Coinbase “should have updated [its] retail terms earlier” and acknowledging that the company “did not proactively communicate”. Following this news, Coinbase’s common stock price fell $19.27 per share, or more than 26%, from a close of $72.99 per share on May 10, 2022 to $53.72 per share. action on May 11, 2022.
Investors continued to learn the truth when, on July 25, 2022, Bloomberg published an article revealing that the SEC was investigating whether Coinbase “let Americans trade digital assets that should have been registered as securities” and explaining that “[i]If these products were considered securities, the company might have to register as an exchange with the SEC. Following this news, Coinbase’s common stock price declined by $14.14 per share, or approximately 21%, from a close of $67.07 per share on July 25, 2022 to $52.93 per share. July 26, 2022.
Then, on September 22, 2022, The Wall Street Journal reported that Coinbase established a business group – the Coinbase Risk Solutions unit – in July 2021 “to generate profits, in part, using the [C]the company’s money to trade and “participate” or lock in cryptocurrencies,” a practice the company’s sources refer to as “property trading.” The Wall Street Journal, the group made a $100 million investment in 2022 to “profit from the cryptocurrency markets,” and the transaction generated an “eagerness to make such additional transactions” within the company. Following this news, Coinbase’s common stock price declined by $4.70 per share, or nearly 7%, from a close of $67.64 per share on September 21, 2022 to $62.94 per share. action on September 22, 2022.
The Laffoon Action alleges that, throughout the Class Period, the Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, regarding the company’s business and operations. Specifically, the defendants made false statements and/or failed to disclose that: (1) crypto assets held by Coinbase as a custodian on behalf of its customers could be considered the property of a bankrupt – and not the company’s customers – in the event that Coinbase files for bankruptcy; (2) Coinbase allowed Americans to trade crypto assets that the company knew or carelessly ignored should have been registered as securities with the SEC; (3) Coinbase intended to engage in, and did engage in, proprietary trading in crypto assets; and (4) as a result, defendants’ statements about the company’s business, operations, and outlook lacked a reasonable basis and misled investors about the material risks associated with Coinbase’s operations.
If you purchased or otherwise acquired Coinbase stock and suffered a loss, are a long-term shareholder, have information, want to know more about such claims, or have questions about this announcement or your rights or interests in these questions, please contact Brandon Walker or Melissa Fortunato by email at [email protected], by phone at (212) 355-4648, or by by filling out this contact form. There is no cost or obligation for you.
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Bragar Eagel & Squire, PC is a nationally recognized law firm with offices in New York, California and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivatives and other complex litigation before state and federal courts across the country. For more information about the company, please visit www.bespc.com. Lawyer advertisement. Prior results do not guarantee similar results.